The effects of the pandemic and the restrictions on the movement of people and on non-essential business activities had a significant impact on Hebe, which has nearly half of its stores located inside shopping centres where foot traffic decreased dramatically, even when they weren’t closed. In a year in which face-to-face social interaction was virtually non-existent, Hebe’s like-for-like sales fell 10.3%. 2020 was a year of transformation for Hebe, which discontinued its pharma business and saw its e-Commerce channel, launched in July 2019, become key to partially cushioning the negative impact the pandemic had on sales. This digital channel, which will soon be taking the Company to sell internationally, is expected to boost growth in the coming years.
Pingo Doce and Recheio were, without doubt, the Group Companies hardest hit by the crisis. After their outstanding performance and increased market share in 2019, the pandemic struck them with full force. The measures that Portugal implemented to fight the spread of the virus and the dramatic decline in tourism took a heavy toll on businesses that rely on the regular purchases and activity of restaurants, cafés and coffee shops, takeaway and food service.
Showing a remarkable fighting and resistance spirit, Pingo Doce never gave up trying to entice the customers that fear of infection drove to seek larger and less crowded stores. In spite of intense promotion of and innovation in its assortment, sales dropped to 3.9 billion euros and like-for-like sales (excluding fuel) fell 2.2%. EBITDA decreased 15.4%, reflecting the additional costs incurred, and that the drop in sales was unable to offset, with the need to halt progression of the pandemic and mitigate its socio-economic impacts.
For Recheio, which in 2019 broke the billion-euro sales barrier for the first time, 2020 was its annus horribilis. With the heavy restrictions and/or extended closure imposed on cafés, coffee shops, restaurants and hotels, the Company lost one of its major sources of income. Sales fell 15.9%, like-for-like contracted 15.8%, and EBITDA stood at 45.6% below that of the previous year.
In Colombia, where the pandemic saw poverty indicators and social suffering skyrocket, Ara further strengthened the competitiveness of its customer value proposition, ending the year with double-digit like-for-like growth (+10.2%). The Company also increased its cost discipline, which enabled it to reduce EBITDA losses by 8 million euros, continuing on its path towards profitability.
As a Group, we continue to invest in the Agribusiness area in Portugal, where we proudly implement best sustainability practices in the production areas we focus on: dairy, aquaculture and Angus beef. In 2020, we also ventured into agriculture, where we will invest more and selectively in organic production, in line with the EU’s “Farm to Fork” strategy.
The results in the countries where we do business were achieved in an incredibly difficult climate, facing pressure from multiple sources, from the ethical imperative to meet the social needs that emerged and worsened, to continuing to make progress on our environmental commitments.
Environmental risks, which in 2020 were already at the top of the list in the World Economic Forum’s Global Risks Report, should concern us even more, now that we know how protecting nature and ecosystems helps shield against pandemic threats.
After the hottest decade on record, we are entering the decisive decade for climate action.
The Group is committed to fighting climate change, just as we are committed to protecting biodiversity on land and at sea, to fighting pollution, namely plastic pollution, to sustainable use natural resources, to fighting food waste, and to proper waste management. This while at the same time we are proud of developing and improving food products to promote human health, taking into account the nature and the origin of their ingredients, balancing production processes and mitigating their ecological and socio-economic footprint.
In 2020, despite the pandemic and also because of it, we bolstered our role as responsible corporate citizens in the countries where we operate.
We closed the year with 33 ESG (Environment, Social and Governance) analysts directly following our activities and assessing our performance (compared to 27 at the end of 2019). We are also listed on 30 new indices, bringing the total number of indices (include specific indices) on which the Group is listed to 91. One of these new indices is the Bloomberg Gender Equality Index, with ours being the only company based in Portugal in our sector to be listed (the sector is represented by just 25 companies worldwide, out of the 380 companies across 11 industries included in the index). Another example is our inclusion in the Euronext® Eurozone ESG Large 80 Index, on which we were listed in June 2020.
We maintained or improved our performance in the various indices on which we are listed and are particularly proud of the ‘A-’ score (for the implementation of best practices) we achieved in the CDP Forests theme for all commodities linked to deforestation risk: palm oil, soy, beef, paper and timber. We are the only food retailer in the world to have achieved this score in both 2019 and 2020. We also achieved a score of ‘A-’ in the CDP Climate Change 2020 questionnaire, which, according to CDP’s report, is “higher than the European regional average of ‘C’ and higher than the average of ‘C’ obtained by the retail convenience sector”. We are also pleased to have climbed to the 98 percentile among all food retail companies assessed in the FTSE4Good indices.