Discounter Action sees sales surge after store expansion

European discount retailer Action delivered sales growth of 21% in the first quarter, the chain's private equity owner 3i said on Thursday, as the company expands its store network and attracts more people shopping on a budget.

European discount retailer Action delivered sales growth of 21% in the first quarter, the chain's private equity owner 3i said on Thursday, as the company expands its store network and attracts more people shopping on a budget. Action has been a beneficiary as inflation in Europe reduced consumers' spending power, driving them to trade down from more expensive supermarkets to find cheaper alternatives for everything from laundry detergent to pet food.

Action stores sell branded food and household products, toys, kitchenware, DIY items and decorations, and it says two-thirds of its products cost less than 2 euros ($2.15). The retailer sources from stocklot traders, importers, manufacturers, and big consumer brands, and only one-third of its product offering is fixed - which it says draws shoppers in to "treasure hunt".

Action has stores in 12 European countries, having opened its first store in Portugal in February after adding 303 new stores overall last year. Its largest store network is in France, with Germany and the Netherlands also core markets. Action's net sales rose to 3.004 billion euros ($3.23 billion) in the first quarter from 2.485 billion a year earlier, and like-for-like sales grew by 9.8%.

3i said Action generated a gross investment return of 3.718 billion pounds, or 33%, in the financial year ended March 31. "Action's compelling growth story continues to be a major driver of the Group's return," 3i Chief Executive Simon Borrows said. ($1 = 0.9314 euros) ($1 = 0.9312 euros)

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