Laurus optimistic but sales fall further

By Anita Awbi

- Last updated on GMT

Related tags Laurus Retailing

Dutch supermarket Laurus has reported a 3.6 per cent drop in
like-for-like sales for the first quarter, but insists the company
is set for recovery this year.

The retailer, second only to Ahold in the Netherlands, has been suffering from diminishing margins and disappointing results for more than five years.

But last week's Q1 results indicate a change in fortunes, said the chain.

Combined like-for-like sales across all Laurus formats, including Edah, Konmar and Super de Boer, decreased by 3.6 per cent in 2006's first quarter, compared with the 8.5 per cent drop suffered in the same quarter of 2005.

The company claimed the results indicate a "continuation of the encouraging trend in 2005 when the gap between Laurus sales and market growth was narrowed appreciably."

It said the change is most visible within the Super de Boer format, which posted positive like-for-like sales growth of 0.5 per cent, though the figures were adjusted for a late Easter.

Like-for-like sales for Edah and Konmar were together down 3.3 per cent.

Overall, net sales are continuing to fall - at €680m last quarter they are down nearly five per cent on last year's €711m.

But Laurus said operational improvements, a restructuring programme and the sale of poor-performing stores will turn 2006 revenues around, as the firm focuses on growing margins and sales.

Super de Boer, currently the largest Laurus format with 365 stores, has seen an increase in checkout transactions throughout the first quarter.

And a recent Supermarket of the Year award highlights its commitment to modernisation and high quality fresh produce, the company said.

In February Laurus announced plans to sell off the burdensome chains Konmar and Edah, which have both been losing money for some time.

The company said the two chains were no longer sufficiently profitable, and will instead concentrate on its Super de Boer supermarkets.

Laurus, which is partly owned by France's Casino group, will pump €36 million into the remaining chain to rejuvenate the brand, helping it compete in the tough food retail sector.

The divesture of the unwanted chains is likely to raise more than €250m, said analyst firm SNS Securities.

Meanwhile having successfully driven rival Laurus out of the running, Ahold comfortably holds the retail top spot in Holland, in an industry worth €29bn according to Mintel.

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