BBJ: How has the 2024 financial year been for Penny Hungary? What are the highlights?

Mathias Mentrop: We are still before the most important shopping period of the year, Christmas/New Year. In 2023, our turnover was above EUR 1.2 billion, a double-digit growth compared to the previous year. What we can say about 2024 is that, once again, the year was challenging. We have a great responsibility to show our customers that the market is stabilizing and inflation is becoming more moderate. The cost of shopping makes it very tangible for them.

Our primary focus in 2024 is on retaining current customers and gaining new ones; therefore, we made further improvements in our processes, optimizing our operations. But our job remained the same: to retain the trust of our customers that we are providing daily value-for-money shopping throughout the country. This is our core DNA, so we put a great emphasis on our assortment and providing even greater offers for our customers. This year, we have opened five stores thus far, which aligns with our focus on extending our network in rural areas. By the end of 2024, we will have 238 stores. We believe in the market and plan to expand as local opportunities allow.

BBJ: Given the competition that is out there on the Hungarian High Street, what makes Penny stand out?

MM: We are proud to say that almost 90% of our store network is in the countryside and there are many areas where we are the number one choice for groceries. Also, we provide the same assortment at the same price point and an excellent price-value ratio in our stores, which is very attractive to our customers. The Hungarian market is very competitive, and there are many options for a customer. Hence, at Penny, we provide extra features to improve the shopping experience, such as expanding further in e-commerce. In all our stores, we have partnered with Munch, the food-saving platform, which is a great way to eat more sustainably. On the other hand, this is a fantastic option to save even more if you are on a budget because the package discounts are at least 50%. We believe this service can be attractive to the youngest and to the older generation. If you are looking for more comfort and picking your favorite products from your couch, or you are in a rush and some ingredients are still missing from your next meal, we provide a solution for that too: from November, you can find us in all towns served by the Foodora delivery service. Moreover, we are also cooperating with the Roksh shopping and delivery service, through which we cover more than 50 settlements in Hungary.

BBJ: Penny has been going through a rebranding exercise in recent years. Where are you in that process now, and what has been the public response to it?

MM: Our entire store network has been renewed, and our product range has broadened significantly. It is time to act further, so we are now boosting our communications. Our focus is currently on our dedication to local products. We have launched the “Selected from Home” campaign, which takes a “from the farmer to our shelves” approach. The campaign showcased the ideals that we work with every day: Value for Money, Hungarian Products, and Sustainability.

The next significant step is the cooperation with our celebrity chef Richard Farkas, who shows how high-quality and budget-friendly meals can be prepared from our products, even at the chef-quality level. We have an excellent morning TV show cooperation, now expanded with Chef Ricsi’s appearance, which also positions Penny in terms of quality.

Change is always a challenge, for our employees and, to some extent, our customers because it takes us out of our comfort zone. It is the management’s responsibility to maintain the motivation in the team and encourage them to be bold. We can only reach our shared goals through teamwork, and I believe the recent years have shown our developing results. Our efforts were honored with the “Retailer of the Year” special award for the first time because our professional partners also recognize the hard work we put into our development.

BBJ: How much of the produce on your shelves is sourced in Hungary? How does this share compare with the five other Penny national markets?

MM: Some two-thirds of our assortment is sourced locally, and we always seek to increase this ratio. We also label these products as “Selected from Home,” so it is easier to orientate the customer. Additionally, we have more than 10 years of cooperation with the Hungarian Product Nonprofit Ltd. So far, more than 600 of our own-brand products have this labeling. We aim to reach 1,000, so we actively promote this aspect to our suppliers. Customers are also searching for these labels since this is an important decision-making factor for them, right behind price and quality. We are proud to be winners for the third consecutive year of the Retail Excellence Award for Hungarian products.

BBJ: Every Christmas, Penny traditionally supports local Hungarian charities. Will you do so again in 2024? Who will benefit, and what will be the fundraising targets?

MM: Children have been at the heart of our year-round CSR initiatives for many years. This year, we are proud to partner with SOS Children’s Villages to support children in need. Together, we are focusing on three key activities:

I. Allocating a portion of the proceeds from certain product purchases to the organization, with a target donation of HUF 10 million.

II. Engaging our employees in getting Christmas presents for disadvantaged children.

III. Sponsoring the Santa Claus Run in Budapest, where we’ll collect toys and essential items in collaboration with SOS Children’s Villages while also raising awareness about the importance of charitable giving.

In addition, we are supporting the International Children’s Safety Service in hosting events to brighten the holiday season for needy children so they can fully enjoy the spirit of childhood. We recently concluded a successful fundraising campaign with the Red Cross at Penny, where we collected 43 tonnes of food in almost 160 stores to assist families as they prepare for Christmas.

BBJ: Finally, what plans does Penny Hungary have for 2025?

MM: The focus will continue to be on our customers’ needs, and we closely monitor their feedback, so improving operational excellence will be critical. Guaranteeing great prices for our customers is still one of our missions, but innovation and support of local partners will also be in our focus, as before.

This article was first published in the Budapest Business Journal print issue of November 29, 2024.