Polish grocery retail networks are increasing their revenues but many of them record a very low profit or even a loss, according to a report by Bisnode Polska. For example, the Polish unit of Tesco had revenue of zł.11.9 billion in 2011, with a net profit of just zł.76.8 million. Kaufland had a revenue of zł.6.4 billion, but the company posted a net loss of zł.81.3 million.

Adam Kaptur from brokerage Millenium Dom Maklerski told Dziennik Gazeta Prawna that one of the reasons for this is tax optimization within capital groups. Retailers may be transferring profits to foreign companies from the same group. This may add to the high expenses, such as those of expansion of the retailers’ networks.

Foreign chains operating in Poland remain the top earners. The only Polish company that recorded over zł.2 billion in revenue is Polomarket. The foreign chains have it easier since due to their size, they can get better prices from manufactures.

“The price war is taking its toll on everyone. The profitability of big supermarkets is at 2 percent, discount stores at 3 percent,” explains Andrzej Faliński, president of Polish Organization of Trade and Distribution.

Poland A.M.