- Eurocash has implemented a deep savings plan to offset the impact of the minimum wage increase on the company's results.
- One-off costs related to employment restructuring in the first quarter of this year amounted to PLN 11 million.
The Eurocash group is implementing a program to reduce employee costs. In the subsidiary – Polska Dystrybucja Alkoholi – 138 people were laid off. Trade unions are fighting for better conditions for laid off employees. The average employment in PDA in 2022 was 230 people. The company generated a profit in 2022 of PLN 7,076,022.
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5 Eurocash warehouses closed. Plans to achieve cost synergies
Double increase in minimum wage disrupts Eurocash's results
In May this year, we reported that Eurocash had implemented a deep savings plan to offset the impact of the minimum wage increase on the company's results. The group will reduce employment by over 1,100 people.
The Group recently announced its financial results. Eurocash recorded a 1% decrease in sales of goods by PLN 157 million (i.e. 16%) in the period from January to June 2024 compared to the same period of the previous year, and a decrease in EBITDA by PLN 70 million (i.e. 16%). In the period from January to June 2024, a sales profit of approximately PLN 23 million was recorded, which was PLN 99.4 million lower compared to the same period of the previous year.
Net loss amounted to PLN 87.15 million compared to PLN 1.04 million profit in H1 2023.
Two minimum wage increases
The Group reported that the increase in the value of sales of the Group's products was also related to the growing cost pressure for the company, resulting from, among others, higher wages and indexation of rent rates. In 2023
The minimum wage was increased twice – in January to PLN 3,490 gross, and in June to PLN 3,600 gross, which was an increase of 19.6% y/y. In 2024, the minimum wage will also increase – from January to PLN 4,242 gross (an increase of 21.5% y/y), and from July to PLN 4,300 gross, which means
an increase of 19.4% y/y.
