Poland's Eurocash bets on promotions as consumers cut back

GDANSK (Reuters) - Poland's largest wholesale consumer goods distributor, Eurocash, is stepping up promotions as consumers rein in spending amid high inflation, its chief executive officer Pawel Surowka told a conference call on Tuesday.

The comments came after Eurocash reported a net profit of 67.1 million zlotys ($15.52 million) for last year. That compared with a loss of 113.6 million zlotys a year earlier, and sent the company's shares up by more than 10% in morning trade.

"There is definitely trading down. We can also see that consumers are buying less and that's noticeable in the volumes," Surowka said.

"We are currently making sure that we have much more aggressive promotions. We are also investing heavily in our own brand capacities and having very honest and tough negotiations with our suppliers," he added.

Eurocash's revenues rose a little over 17% last year to 30.86 billion zlotys. Its operating result increased to 403.7 million zlotys.

Surowka said 2022 was "extremely complex in many ways. It was marked by war in Ukraine, the energy crisis and high inflation".

This year, the wholesaler wants to focus on further developing digital tools for its clients. It also plans to introduce a loyalty programme for customers of its ABC, Groszek and Euro Sklep chains.

($1 = 4.3229 zlotys)

(Reporting by Patrycja Zaras, additional reporting by Maria Gieldon, Editing by Louise Heavens and Mark Potter)