Labour costs in back-office operations will be reduced by 15%, for example, which means over 200 jobs, said Balažič.

Jobs will also be shed in markets which Mercator plans to abandon (Albania and Bulgaria), and with the folding of several subsidiaries into the parent company.

In stores, however, the headcount will not be reduced, as almost all outlets are profitable.

However, Balažič said job cuts will not be enough to "make Mercator a normal company again". "We have to optimise supply and logistics, we have to have a bolder approach. Until 2016 we have to save EUR 80m," he said.

Even though Mercator's debt has nearly doubled in the past 5-6 years and 45% of all outstanding loans fall due this year, Balažič says Mercator is adequately capitalised and would continue to settle all of its liabilities.

"In the past month we reached an agreement with the key banks on finding a sustainable system of financing within the next six months," he said.

This will give the company "some time to find the best solution to align Mercator's ability to normally settle its liabilities from current operations with the banks' desire that we reduce debt to sustainable levels as soon as possible."