Jeronimo Martins SGPS SWOT & PESTLE Analysis
COMPANY PROFILE -Jeronimo Martins
Business Sector :Retail Chain and Food Distribution
Operating Geography :Portugal, Poland and Columbia
About Jeronimo Martins :
Jeronimo Martins is a Portuguese corporate group that operates in Food Distribution and specialized retail. The company is headquartered in Lisbon, Portugal and it primarily engages in the manufacture, distribution and selling of food and various consumer goods products. Jeronimo Martins operates through five different segments: Portugal Retail, Portugal Cash & Carry, Poland Retail, Portugal Manufacturing and Others. Additionally, the company operates drugstores under the Hebe banner and numerous pharmacies under the Apteka Na Zdrowie brand name. Jeronimo Martins employs a workforce of 1,15,428 people across all of its locations as of 2020. The company was founded by Jeronimo Martins in 1792. Jeronimo Martins operates within the framework of responsible business management and focuses on satisfying the needs and aspirations of its shareholders and their corresponding interests in short, medium and long terms, consequently contributing towards the development of its regions in a sustainable manner. The company sends 84.8% of waste generated by their Group for recovery and promotes recycling by placing 12,175 recycling bins in Group stores. Jeronimo Martin’s rise to 50th in the “Global Powers of Retailing 2020”, the best place ever obtained in Deloitte’s annual study, which lists the 250 largest retailers in the world - has been its greatest accomplishment.Jeronimo Martin’s unique selling proposition or USP lies in being the leader in the food distribution sector in Portugal. It ranks 33 among the food retailers globally and if only Europe is considered, it ranks 16th. Jeronimo Martin’s mission statement reads, “To satisfy the legitimate interests of Shareholders through a strategy focused on value creation and sustainable development.”
Jeronimo Martins Revenue :
€18638 billion- FY ending 31st December 2019 (y-o-y growth 7.5%)
€17337 million - FY ending 31st December 2018
Competitive Analysis of Jeronimo Martins
| Strengths | Weaknesses |
| 1. Leading food distribution chain in Portugal 2. Jeronimo Martins showed resilience amid Covid due to potential of Biedronka 3. Rapid expansion through store launches and refurbishing outlets in existing markets 4. Over 2 centuries old legacy business of food distribution | 1. High dependence on one brand reflecting for lion’s share of the revenue 2. Poor performance in Columbia 3. Lack of hedging initiative of currencies amid volatile global economy 4. Low margins and high liabilities makes the balance sheet look weak |
| Opportunities | Threats |
| 1. Diversification of business in processed food industry 2. Appealing younger consumers by boosting automation and e-commerce in business | 1. High fluctuation of Columbian Peso compared to Euro 2. Several lawsuits may cost dearly to the company 3. High competition in the retail segment 4. Uncertainty over Brexit looming large |
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Detailed SWOT Analysis of Jeronimo Martins
Strength
1. Leading food distribution chain in Portugal: Jeronimo Martins Group (JMG) operates majorly through two brands in Portugal, Pingo Doce and Recheio. JMG is the largest food distribution and consumer durables chain in Portugal. Pingo Doce operates in supermarkets segment with 441 stores and Recheio has 42 stores and platforms, both holding leadership positions in their segments. Pingo Dece also operates restaurants in 36 supermarkets with Take Away counters. The banner also has drugstore, clothing and shoe brands, namely, Bem-Ester, Code and Spot. Through Jeronimo Martin's Agro-Alimentor, food products derived from dairy products, livestock farming and aquaculture are provided. It leverages the group’s position in Portuguese market as both producer and supply chain service provider.
2. Jeronimo Martini showed resilience amid Covid due to potential of Biedronka: JMG has outperformed market expectations even during pandemic. Covid-19 brought the economy and public movement to a gruesome halt with closures of supermarkets. The major part of services of JMG include essential items like food and household items but there was a cardinal concern of supply chain disruption and shortage of labourers due to the lockdown. Even in such demanding situations, the group showed resilience in its business through e-commerce and home deliveries especially due to it retail chain banner, Biedronka, the largest supermarket chain in Poland operating 3002 stores as of early 2020. Biedronka alone provided profit to the group, although other banners could not perform amid pandemic. With regular contribution in-group revenue above 60%, sales of Biedronka grew by 7.8% y-o-y to €6536 million in half yearly results of 2020. The group's sales grew by 4.6% to €9317 million in H1 2020 with EBITDA margin of 4.7% and net profit margin of 1.4%, which was worth €132 million.
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Weakness
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Opportunity
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Threats
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Major Competitors :
- Sonae, Auchan
- REWE Group
- Dalian Wanda
- Egis
- Unibail
- GPT Group
- Simon
- Scentre Group
- JB HI-FI
Major Brands :
- Biedronka
- Hebe
- Pingo Doce
- Recheio
- Ara
- Jeronymo
- Hussel
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Jeronimo Martins Analysis Report
1. 2019 Annual Report Jeronimo Martins -
https://www.jeronimomartins.com/wp-content/uploads/01-DOCUMENTS/Investor/Reports/AnnualReportJeronimoMartins2019.pdf
2. Europe faces deep recession and UK will shrink by 10%, says EC -
https://www.theguardian.com/business/2020/jul/07/europe-recession-uk-ec-eu-recovery-plan
3. Europeans Are Changing Dietary Habits To Address Covid-19 -
https://industryeurope.com/sectors/food-beverage/europeans-are-changing-dietary-habits-to-address-covid-19/
4. Jerónimo Martins SGPS (ELI:JMT) Seems To Use Debt Quite Sensibly -
https://simplywall.st/news/jeronimo-martins-sgps-elijmt-seems-to-use-debt-quite-sensibly/
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Jeronimo Martins SWOT and PESTLE analysis has been conducted by Tej Narayan Shaw and reviewed by senior analysts from Barakaat Consulting.
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