Jeronimo's ambitious expansion

Its current share of the Polish discount-store market amounts to 54 percent.

Biedronka's sales of zł.6.6 billion in 2006 already account for some 40 percent of the whole group's results, and are 23 percent higher than in 2005. Last year Jeronimo Martins Dystrybucja (JMD) opened 110 new stores and now has 905 of them in 450 towns and cities across Poland. Pedro Pereira da Silva, JMD's managing director, says the number will grow.

"In 2007 we want to invest between zł.500 and zł.600 million in 100 new shops and a new logistics center. However, it will not be an easy year," says da Silva. This is because of the likely entrance of one, if not two powerful players onto the market.

American Wal-Mart and German Aldi have both expressed an interest in investing in Poland. Regardless, JMD plans continued growth. The company will either construct new buildings, modernize and adapt the existing ones or perhaps take over other branded discount stores.

"We already acquired several stores from the Metro Group in 1999, and several Rema 1000 stores. We can do it again as long as the transaction makes economic sense," says da Silva.

According to da Silva, 95 percent of all products sold by Biedronka come from Polish producers, and some 60 percent are Biedronka's exclusive brands. "Every year we add between 40 and 60 new brands," adds da Silva.

JMD is also exploring the drugstore market. The first Apteka na Zdrowie was opened in Otwock on December 21, 2006. "We are planning to open several more, possibly not far away from Warsaw, to assess the market," says Jose Brito, managing director of Bliska, the subsidiary of JMD that is managing its expansion into the drugstore market.

Last week Portuguese daily Diario de Noticias reported that Jeronimo Martins was planning on opening up to 360 new stores in Poland by 2009, but da Silva was tight-lipped about the company's longer-term plans.

Andrzej Wróbel