The Portuguese retailer sold and profited more in 2019. Now it wants to continue growing.
Jerónimo Martins will invest between 700 and 750 million euros this year to reinforce the activity. The plan is to limit the number of new stores but to improve those that already have, while investing on the takeaway. CEO Pedro Soares dos Santos wants to expand to three new countries in the future.
“Pingo Doce will be more and more a catering company. It’s what the Portuguese want more and more – ready to take home meals. It’s a path we’ll continue to take,” the manager announced at the press conference where he presented the results for 2019.
Jerónimo Martins closed last year with profits of 433 million euros, an increase of 7.9% on the previous year. Group sales reached 18.6 billion euros, with the takeaway currently contributing 150 million to the activity in Portugal. Pedro Soares dos Santos wants to see this amount rise.
Pingo Doce will have a restaurant outside the supermarket
“Pingo Doce will develop its new store concept, centred on the area of catering and ready-made food and supported by the increased capacity resulting from the recent opening of another central kitchen and additional investment in meal solutions know-how,” announced in the results report.
At the press conference he gave yet another update: “Let’s open a standalone restaurant,” he said, without adding further information. Pingo Doce has its own production of meals, having opened, in 2019, a new mega kitchen (in Aveiro, which joined the existing one in Odivelas) which received a 17 million euros investment.
Czech Republic, Slovakia and (later) Romania
Jerónimo Martins plans to open new stores: 100 from the Polish Biedronka (60% of which in the standard format and the rest in the smaller concept), 50 from the Polish Hebe beauty brand and 130 from the Colombian Ara. In Portugal, there will be ten new Pingo Doce brand locations and one Recheio location (in Cascais).
But there are different strategies. If growth in Portugal means strengthening this business segment, the plan is different out there. With the Hebe brand, Jerónimo Martins is preparing to enter two new countries: the Czech Republic and Slovakia. This expansion is expected to take place later this year, and the next country that Soares dos Santos has in mind is Romania, which could happen through acquisitions.
The company justified its dividend policy by wanting to have room to seize any “potential opportunity for non-organic growth” while maintaining a low level of net debt. Asked about the possibility of making acquisitions, the manager did not deny and pointed to Romania with a potential market.
“Jerónimo Martins has made a very big reinforcement in its balance sheet because the time is coming for Biedronka to grow across borders. Everyone knows that what we would like is Romania. Whether it will be this year or next year we don’t know, but it is in the short term,” the CEO explained. “We are going to draw up a plan for 2020 for 2025 and Romania is certainly there.”