Mercator, the largest food retail group in Slovenia, has reported net sales growth of 14 per cent for the first half of 2008, largely as a result of its growing business in Balkan countries such as Croatia, Montenegro and Serbia.

The retailer's net profit for the six-month period hit €22m on sales of €1.3bn, Reuters reported.

However, parent company Mercator d.d saw net profit fall 4 per cent to €15.5m, with chief executive officer Ziga Debeljak blaming rising inflation in the Slovenian market for the drop.