Czech retail chain Penny Market increased its profit by 22 percent year-on-year to CZK 1.153 billion last year. The chain’s sales rose 15.5 percent year-on-year to CZK 48.7 billion. The company operated 409 stores at the end of last year, according to its annual report. Penny Market is part of the German REWE Group, which also includes the Billa chain. The group’s profit fell by a third year-on-year last year.
The REWE Group increased its sales by 10.4 percent to 84.4 billion euros (over two trillion crowns) last year, but its net profit fell 33.4 percent to 503.5 million euros (about 12.27 billion crowns). Rival Schwarz Gruppe, which includes Kaufland and Lidl stores, increased sales by 15.4 percent to 154.1 billion euros (3.6 trillion crowns) last year.
The president of the Union of Trade and Travel (SOCR), Tomáš Prouza, said after a meeting with Prime Minister Petr Fiala (ODS) and Agriculture Minister Marek Výborný (KDU-ČSL) on Thursday about food prices in the Czech Republic that supermarket chains will not have significantly better economic results last year than in previous years. He also does not expect any of the retailers to see their profits grow by 50 or even 100 per cent, as was the case with some chain suppliers.
Penny Market had a roughly billion profit already in 2020, a year earlier its profit was CZK 676 million and in 2018 around CZK 865 million. According to Prouza, the profits of the supermarket chains will be affected by last year’s drop in sales as people saved more due to high inflation. He also noted that retail was also one of the few sectors where people maintained real wages because companies raised them in response to inflation.
Penny Market announced early last year wage increases averaging 7.5 percent since March. Last year, according to its annual report, the company had an average of 5,905 employees, 43 of them in management positions. Compared to 2021, it employed 144 more people. The company opened 12 new stores last year and closed two.
Penny Market has a large share of private brands in its assortment. According to an earlier statement by spokesman Tomáš Kubík, they account for more than 40 percent of sales and can be expected to reach 50 percent in the future. Following its investigation in the spring, the Office for the Protection of Competition (ÚOHS) said that chains are beginning to compete with manufacturers’ brands with their private labels. For example, for fresh milk, the ratio is 75 percent private label to 25 percent of so-called branded products, i.e. food manufacturers’ brands, and for flour, the chains’ private labels account for 80 percent of the range. The proportion is lower for butter, where chain brands account for a quarter of the range. The OCC said that based on 2021 sales, Penny Market has a 10.6 per cent share of the supermarket chain market. The REWE group has almost 19 per cent.
Source: Penny Market and CTK
Photo: Penny Market
