Customer reorientation towards inexpensive products boosts Profi’s business in Q1

“There is a clear trend of consumer reorientation towards inexpensive products in the current economic context. Compared to the same number of stores, the sales increase was 30 percent in Q1,” the General Manager of Profi Rom Food, Caius Crisan, told Business Standard.

“The EBITDA [earnings before interest, taxes, depreciation, and amortization] indicator rose to some 5.7 percent in this year’s first quarter from 2.9 percent in the first three months of 2008”, Crisan added.

According to consultants in the industry, the discount segment is the winner of this period of the economic crisis. Clients are opting for economical products, and discount stores have the best price offer. Considering that consumers will prefer frugal shopping, which would require minimum transportation, the discount store responds best to this trend, as it is in proximity of the neighborhoods.

Moreover, the company’s product portfolio rose threefold in the past three years, “to 4,000-5,000 products in units outside Bucharest and some 6,000 in units in the capital. We are planning to introduce a further 200-300 food products in the near future, of which 50 percent will be on the first price level and own brands,” the company official said.

The General Manager of Profi Rom Food said at the beginning of 2009 that the current economic context favors the network’s expansion plan, considering that the prices of land, construction materials, and rents are declining.

Profi has budgeted €170 million worth of business at the beginning of 2009, up 21 percent year-on-year, considering that the network expansion will raise the number of employees to 1,500, according to Crisan.