Jerónimo Martins: The Portuguese Company That Is Really a Polish Discounter

No Portuguese company has ever executed an international bet as large or as successful as Jerónimo Martins’ entry into Poland. A family-controlled grocery group from a country of ten million built the dominant food retailer in a country of thirty-eight million, from scratch, over three decades. This case study explains how the discount model worked, why the group’s Portuguese identity is now mostly a listing address, and where the risks now sit. It is part of the Portugal Company Stories hub.

How did a Portuguese grocer end up owning Poland’s largest retailer?

By arriving early and committing completely. Jerónimo Martins entered Poland in the mid-1990s, shortly after the transition from central planning, when modern food retail barely existed and Western competitors were focused on larger, richer markets. It acquired a small chain called Biedronka — Polish for ladybird — and rebuilt it as a hard discounter.

The timing mattered enormously. Poland was a market with rising incomes, a large population, no incumbent modern grocery network and consumers who were highly price-sensitive. A discount format with a limited assortment, high private-label share and aggressive everyday-low-price positioning fitted that demand precisely.

Thirty years later, one in three Polish consumers shops regularly at Biedronka. The company has consistently outgrown the Polish food retail sector, and its scale now gives it purchasing power that no competitor in the market can match.

What did the group actually earn in 2025?

Sales of around €36bn, up 7.6%, with Biedronka exceeding €25bn, up 7.5%, in a Polish market defined by cautious consumers, low basket inflation that turned negative in the fourth quarter, and intense competition. Biedronka’s EBITDA rose 9.8% — 8.1% in local currency — with the margin reaching 7.9% against 7.7% in 2024.

That margin expansion in a deflationary quarter is the most impressive number in the report. Discounters normally lose margin when basket inflation disappears, because volume growth alone rarely covers wage increases. Biedronka offset it with cost efficiency and productivity measures while continuing to invest in price.

In the third quarter of 2025, group net profit rose nearly 15% to €214m on sales of €9.14bn, with EBITDA up about 12% to €664m. Nine-month net income reached €484m. Management noted that a 9.2% Polish minimum wage increase boosted household disposable income but that competitive intensity showed no sign of easing.

Why is private label so central to the model?

Because it is where the margin lives and where the price gap is created. Private brand products represented 41% of total sales at Ara in Colombia, 38% at Biedronka and 24% at Recheio. In a discount model, private label allows the retailer to control specification, cost and shelf price without a branded manufacturer capturing the spread.

It also builds defensibility. A customer who buys a branded product can compare prices across retailers instantly. A customer loyal to Biedronka’s own-brand yoghurt cannot, which converts price competition into brand competition on ground the retailer owns.

The strategic cost is supplier dependence in reverse: the retailer becomes responsible for quality, food safety and supply continuity. Jerónimo Martins has built substantial supplier development capability in Poland as a result, which is itself a barrier to entry for newcomers.

What does the Slovakia entry signify?

It is the first time any Jerónimo Martins banner has internationalised on its own. Biedronka entered Slovakia in 2025, closing the year with 15 stores and one distribution centre — a deliberately small footprint designed to test the model rather than to seize share immediately.

The logic is adjacency. Slovakia borders Poland, shares supply chain geography, has similar consumer income levels and a comparable competitive structure. Biedronka can supply it from existing Polish infrastructure while learning a new regulatory and labour environment at low cost.

It also answers the group’s central strategic problem: Poland is approaching saturation. Biedronka opened 181 stores in Poland in 2025 with 152 net additions, roughly half in smaller formats, but a chain of more than 3,800 stores in a country of 38 million cannot compound at historical rates forever.

How is the Colombian business performing?

Better, after a long and expensive learning period. Ara entered Colombia in 2013 and spent a decade absorbing losses while building density, supply chain and consumer acceptance. In 2025 the focus shifted to protecting gross margin and controlling costs, and the banner showed significant margin improvement.

Colombia is a fundamentally harder market than Poland was. Informal retail remains large, logistics across dispersed geography is costly, the currency is volatile and the competitive field already contained established players when Ara arrived.

The instructive point for anyone studying international expansion is duration. Jerónimo Martins was willing to fund a business for more than ten years before it approached sustainable profitability. Most listed companies cannot hold that position against shareholder pressure, and family control is precisely what made it possible.

What is the capital allocation discipline?

Capital expenditure is the first claim on cash. The group invested roughly €1.2bn in 2025, opening 448 new stores globally — more than one per day — refurbishing 281, expanding the network beyond 6,500 locations and commissioning two new Polish distribution centres, one of them automated.

The balance sheet remains conservative, with net debt to EBITDA held at a low multiple, and the group has consistently funded expansion from operating cash flow rather than leverage. This is unusual among European retailers and reflects the founding family’s controlling position and long horizon.

Automation in distribution is the visible priority now. Polish wage costs have risen faster than prices for several years, and warehouse automation is the main lever available to a retailer that has already optimised store labour.

How should the Portuguese business be understood?

As a mature, high-quality, low-growth cash generator rather than an engine. Pingo Doce is the leading supermarket chain in Portugal and operates the country’s largest restaurant network through its in-store food areas; Recheio leads the cash-and-carry segment serving independent retailers and hospitality.

Both compete directly with Continente, the market leader operated by Sonae, in a domestic grocery market that is among the most concentrated and most price-competitive in Europe. Portuguese consumers have some of the highest promotional participation rates in the EU, a habit both groups have trained into them.

For the group, Portugal provides stable cash, a talent and management pipeline, and the corporate home. It does not provide growth, which is why every strategic question about Jerónimo Martins eventually becomes a question about Poland.

What should other companies learn from this?

Three things. First, the largest returns from international expansion come from entering a market before it becomes attractive, not after — Biedronka’s position could not be bought today at any price. Second, format matters more than brand: the discount model travelled across borders because it solved a universal problem, low prices, rather than exporting a national identity.

Third, patient ownership enables strategies that quarterly-reporting companies cannot execute. A decade of Colombian losses and thirty years of Polish reinvestment are only possible with a shareholder base that measures in decades.

The uncomfortable corollary is that the same concentration that created the returns now defines the risk. Jerónimo Martins is not really a Portuguese retailer with foreign operations; it is a Polish discounter with a Portuguese head office, and it should be analysed that way.

How does Hebe fit the portfolio?

Hebe is the group’s health and beauty chain in Poland, competing in specialised retail with a broad assortment at competitive prices and an in-store consultation service. It has also opened stores in Slovakia and Czechia, making it the group’s second banner to cross a border.

Its strategic role is category diversification within a market the group already understands deeply. Health and beauty carries higher gross margins than food, grows with disposable income, and uses smaller store formats that fit locations where a grocery box would not.

Execution has been mixed. Hebe experienced substantial margin pressure in 2025 from price investments that drove basket deflation — the standard cost of buying share in a category where consumers compare prices easily and online competitors are aggressive.

What are the sustainability commitments?

The group has committed to reducing scope 1 and 2 emissions by at least 10% by 2026 against a 2021 baseline and to limiting annual food waste to 2.5% of total food sales. Both targets are unusually concrete for a retailer, and the food waste metric is the more operationally demanding of the two.

Food waste is where retail sustainability and margin align directly. Waste is a cost of goods that generates no revenue, so reducing it improves gross margin and emissions simultaneously, mainly through better forecasting, shorter supply chains and markdown discipline.

The group also operates foundations in both core markets, including a Polish foundation focused on poverty and malnutrition among older adults and a Colombian programme reaching tens of thousands of people. In markets where the group is a dominant employer and retailer, social licence is a commercial asset.

Frequently Asked Questions