Operating in seven markets in Southeast Europe, the group expect further international expansion. This year it expects to generate just under a half of sales (44%) on foreign markets, up from 42% in 2011.

Last year, the group generated profits on all markets bar Bulgaria and Albania, which are relatively new, and in Croatia, where the group has been incurring losses since 2009, according to Debeljak.

In Croatia, the retailer is too small to achieve economies of scale, Debeljak explained. Mercator will be examining further options for expansion, including through strategic partnerships with local retailers, while the expansion of regional synergies is expected when Croatia joins the EU, he added.

But he was tight-lipped regarding cooperation with Croatian food group Agrokor. "There have been no changes as far as we are concerned. It is up to the owners," he said, refusing to give a specific comment.

Mercator plans to earmark EUR 88m for investments in 2012, which compares to EUR 122m in 2011. The group has been scaling back on investments in the past years, Debeljak said, adding that the current levels still enabled normal growth and development.

According to board member Melita Kolbezen, the group has net debts of EUR 1.1bn. The management plans to reduce this amount by about EUR 300m in 2012, including through the monetization of real estate.

Yesterday, Mercator reported profits of EUR 23.5m for 2011, down 22.5% year-on-year, with Debeljak saying that 2011 was an "extremely difficult year", especially in the second half when business conditions deteriorated and affected the company's bottom line.

But overall, the group's performance was stable, said Debeljak, who announced a proposed dividend of EUR 4.5 per share, down from EUR 8 in 2010 and EUR 7.2 in 2009. "The proposed amount reflects the difficult overall economic situation," Debeljak said.

Mercator is Slovenia's largest employer and one of the biggest in Southeastern Europe. In 2011, the group employed 24,266 people, while in 2012 the number is expected to reach 24,915.

The group paid a total of EUR 194m in taxes across all markets, EUR 134m of which went into the Slovenian budget. "This places us among the biggest taxpayers in Slovenia," Kolbezen said.

Mercator will hold its annual general meeting on 30 March. The agenda includes dividends for 2011 and the request by Unicredit banka Slovenija for a review of Mercator's steps related to the takeover bid for beverage company Pivovarna Laško.

The shareholders will vote on the proposal to allocate EUR 16.9m of the EUR 28.8m distributable profit for dividends worth EUR 4.50 gross per share. The remainder of the profit is to remain undistributed.

Also put to vote will be the request of the Slovenian subsidiary of Italy's Unicredit bank, which owns 8.01% of Mercator, for the appointment of an auditor who would look into Mercator's withdrawn takeover bid for Laško, which the bank believes may have been harmful for the company.