In his interview given for Delo’s feature Sobotna priloga of 17^th October, Fabris Peruško, Fortenova Group’s Chief Executive Officer, pointed out that after the successful financial restructuring and the divestment of its production companies the Group has become one of the region’s financially most stable companies, its remaining key operational pillars being retail and activities related to it.

He explicitly said that Mercator was not to be divested but, contrary to the rumours, that it was one of the three most important companies of the Group which has, in line with its strategy, transformed its operations into four core businesses: retail, real estate, wholesale – where Mercator Cash & Carry plays an important role, and logistics.

“Today Mercator is a healthy, deleveraged and profitable company which generates approximately 20 percent of Fortenova Group’s total revenues.

In the previous period we have straightened out the problems that had accumulated over the years – from over-indebtedness and inefficiency to unprofitable operations that the company had the least benefit from. Now that all of this has been sorted out, we turn our focus to operations – the improvement of retail and centralisation of warehouses, which will directly contribute to better efficiency” – Peruško said.

In that regard, the priority investment will be the construction and extension of the central warehouse at the existing locations in Slovenčeva Street and Zalog.

On of the points emphasized in the interview was the outright confession that for many years there had been a lack of investment in real estate maintenance, which was about to completely change with the real estate operations having been carved out into a separate sister company.

“Mercator has almost 400 stores all across Slovenia, with as much as 86 percent thereof owned by Mercator’s sister real estate company. I believe that this provides a huge advantage in Slovenia and contributes to resilience in potential crises” – said Peruško and announced an acceleration in the network modernisation: some facilities at excellent locations that, in terms of space, do not meet the contemporary shopping habits anymore, will be demolished and rebuilt, while others will be thoroughly renovated. Following the eight stores refurbished this year, for next year it is planned to renovate another 26 stores and to open three new ones. There is also a comprehensive solution for the Ljubljana-located Maxi under preparation, intended to align strict conservatory requirements with the needs of modern lifestyle.

Peruško paid particular attention to employees and explained that the main focus was on store employees, who directly created added value. This year approximately 19 million euros were invested in salary increases in Slovenia, primarily in stores, with the working conditions thus getting close to those offered by international competitors. He pointed out that further salary increases and operational stability had to be directly related to revenue growth and productivity improvements, which is why new rewarding models and incentives for successful teams were rapidly being introduced.

He also touched upon the situation on the Slovenian retail market which, in his opinion, with a population of two million, was highly concentrated. Peruško stated the position that Mercator, although it featured as much as 80 percent of local products on its shelves, held around one quarter of the market, which means that the origin of the goods was not the only motivation for customers in Slovenia when making shopping decisions. Peruško noted that Mercator would stay a reliable partner to the domestic suppliers, but that overall operations had to be aligned with the expectations and purchasing power of today’s consumers. This means that the Slovenian suppliers had to match their competition in both pricing and quality.

You can read the interview in Slovenian here (.pdf)