2 DE agosto DE 2016
Efraín Aureliano Sánchez
El Corte Inglés will report earnings for the last year, which ended on February 29th, at the end of August. This year is also the 75th anniversary of the company, which is chaired by Dimas Gimeno. Until earnings are released, we'll have to reference the previous results which, despite the company's good overall performance (especially the department store area of the business), reflect a slide in sales in the food retail format.
Earnings for 2014/15 revealed a slide in sales: by 8.5% in the case of the El Corte Inglés hypermarket, and by 4% in the case of the supermarket. The company knows that its food sale formats just don't seem to do well... And while they do provide an excellent look at the mass market industry, where every innovative product has to be on its shelves, consumers don't seem to like Hipercor or Supercor.
In view of this, the company announced at the beginning of the year its plans to sell 200 properties, of which half are supermarkets. "They aren't strategic assets but, rather, properties which are part of a rotation plan all companies have", said El Corte Inglés, although it's true that the company wants to offload about 100 supermarkets. It's in the market to sell, not to buy.
Another company that's in the market to sell, which can't seem to sort out its accounts, is E. Leclerc. In fact, the French hypermarket chain announced in February that it was closing three of its eight stores in the Madrid region, as earnings in the last few years "make their continuity unviable". The hypermarkets that are closing their doors are in the Islazul, Madrid Sur and Dolce Vita Gran Manzana shopping malls, all of which were acquired from Eroski in 2011.
Makro has also been in the news in the last few months, as its Managing Director, José María Cervera, who held the highest executive post in Spain since 2009, has left after 25 years with the company. Cervera achieved several milestones in recent years, including the opening of a new store on Paseo Imperial in Madrid, refurbishment of the store in Barajas and the launch of the "Alma Makro" project to support small producers.
In the year ended September 2015, Makro España registered growth in like-for-like sales relative to comparable surface area of 1.1%, and in May, Olaf Koch, CEO of Metro Group, was pleased because Makro España continued to expand its like-for-like surface area, which is very good news.
However, it remains to be seen how the company deals with Cervera's exit and that of other executives who have also left the company. Christof Knop is temporarily replacing Cervera and reporting directly to Philippe Palazzi, Metro Group's operating partner for Spain, France and Portugal. The cash & carry faces an enormous challenge... we'll see how it handles it.
Movements in Catalonia
Another important cash & carry company is Grupo Miquel, which has opened stores in the last few months in Miranda de Ebro (Burgos), El Puerto de Santa María (Cádiz) and Finestrat (Alicante). But Grupo Miquel also operates supermarkets and, after offloading the SUMA supermarkets it had in Castellón and Tarragona in December 2013, it just can't seem to make things work with the stores it continues to run. To that end, it has redesigned SUMA's image to revitalize the brand and make it stand out. Moreover, it launched SUMA Express, a model which aims to attract consumers to its convenience store format.
About a year after the acquisition announcement from Bright Food (which occurred at the end of September), Grupo Miquel plans to internationalize the business, rolling out its first cash & carry outside Spain, in Shanghai (China). Moreover, it wants to become the platform for selling Spanish products in China, and it hasn't been shy about its plans to acquire companies in Europe. It also plans on opening five cash & carry GMCash and ten gas stations this year in Spain.
In short, Grupo Miquel has lots of plans following its acquisition by Chinese food giant Bright Food. The main challenge faced by the company, which is based in Vilamalla (Girona) is to ensure that its main strength helps with growth and doesn't become a weakness that allows it to lose sight of the "core" of the business.
Condis Supermercats, another business based in Catalonia, currently faces its biggest challenge of the last few years. The arrival of the second generation of the family to the company's executive bodies, which is always good news, has coincided with the exit of Enric Ezquerra, a veteran of the industry who had been with the company for 25 years. Ezquerra's position as managing director has been filled by Manel Romero, who must maintain Condis in very good standing with Catalan consumers and continue to strengthen growth in central Spain.
Another important chain is Bon Preu, which has been performing very well in the last few years, supported by its sales policy, which focuses on a commitment to quality, local products and highly competitive prices. Moreover, it has a portfolio of investments worth over 100 million euros to be completed in the next two years, and it's reinforcing its commitment to Iquodrive, an online sales channel that allows customers to make purchases from anywhere with an internet connection (the customer chooses the day and time he wants to pick up the order and goes to the store by car; Iquodrive employees load the bags into his car). Bon Preu is a chain that should be watched closely in the next few years, since it currently knows exactly how to play up its strengths, diversifying its business as much as possible.
Gadisa, Consum, Ahorramás and Covirán
Another regional chain with big plans for development is Gadisa which, for the first time in its history, obtained more than 1 billion euros in revenues (1.037 billion euros in 2015). The Galician chain is developing superbly, supported by two drivers: its own stores and franchisees. The company currently has 216 of its own stores and 151 franchisees.
Betanzos (A Coruña) is celebrating its 30th anniversary this year. It was created in 1986 through the merger of four companies. Over the years, it has always operated with a strong commitment to a philosophy based on proximity, honesty, service, and meeting the needs of customers by providing them with professional service and the best value for money. The results of these efforts and dedication are reflected in the more than 700,000 customers the company currently has, making it the leading name in the food sector in terms of revenues in northwest Spain.
Consum, a cooperative from Valencia, also performed spectacularly in 2015, with revenues expanding by 9.2%. It's part of this group of regional chains that's doing great work in the sector, creating jobs, opening stores and contributing notably to society with solidarity activities. Its managing director, Juan Luis Durich, is proud of having created almost 1,000 jobs in 2015 and of the fact that 99.6% of Consum's purchases are from national suppliers.
Covirán, a cooperative from Granada, continues to advance well. “We're an important part of Spain's retail sector,” says its CEO, Luis Osuna. With revenues up 4%, the cooperative is looking toward the immediate future with notable growth expectations, as it plans to open 60 new stores this year and strengthen its presence in Portugal, where it's the third-largest supermarket chain.
It's also worth mentioning Ahorramás, the chain based in Velilla de San Antonio (Madrid) which, after seeing its revenues grow by 5.8% last year, expects to end 2016 with 1.584 billion euros. Ahorramás is an example that should be studied at business schools, as it has been successful for more than 10 consecutive years: the company increased its revenues by 33.3% in the last decade, from 1.121 billion euros in 2006 to 1.494 billion in 2015.