5.2
Business segments

5.2.1 Spain & Portugal

Spain & Portugal

The Spanish and Portuguese operations once again posted sales growth, specifically growth in gross under-banner sales of 4.8%. Spain outperformed Portugal despite the sharp deterioration in the former country’s economic environment, with revenue of €4.92 billion, growth of 5.4%.

The group opened a net 98 new stores in Spain, 18 of which under the new DIA Fresh format. These numbers do not include the Spanish and Portuguese stores of the Schlecker chain, the discount retailer specialised in the household, health and beauty products segment acquired last year.

The Schlecker acquisition, a key transaction

DIA announced the acquisition of household, health and beauty products chain Schlecker at the end of September. The transaction was closed at €69.3 million (free of debt). The deal was approved by Spain’s anti-trust authority in December 2012. The acquisition of the 100% of this company closed on 1 February 2013.

This acquisition adds a total of 1,127 outlets in Spain and 41 in Portugal, as well as four distribution centres, three in Spain and one in Portugal. With this step DIA has broadened its offering in household and health and beauty products while shoring up its philosophy of offering neighbourhood shoppers top value for their money, helping to boost their purchasing power.

Minipreço, the Portuguese flagship

Although Portugal remains immersed in a complex economic environment, the sales performance of Minipreço, the banner under which DIA operates in Portugal, was satisfactory. Gross under-banner sales inched 1.6% higher year-on-year to €949.2 million, demonstrating the worth of a business strategy that combines the neighbourhood approach with undisputed price/quality leadership in Portuguese consumers’ eyes.

2012 stood out for the launch of two new store concepts in Portugal. In August DIA inaugurated Mais Perto (which means ‘closer’ in Portuguese), a neighbourhood shopping format under the franchise regime, and in November it opened the first MiniFresh store in Lisbon. The MiniFresh concept prioritises fresh produce and perishables, echoing the DIA Fresh model, albeit adapted to the Portuguese market.

Minipreço’s e-commerce business was also meaningful last year, spurred by the launch of a new website, which in its first six months in existence notched up 57,000 unique visitors. The company also created Minipreço’s Facebook profile, which had over 50,000 fans by the end of the year.

5.2.2 Emerging markets

Emerging markets

Emerging market sales staged a stellar performance. Brazil was the biggest contributor with gross under-banner sales of €1.53 billion, growth of 23.1% in constant currency terms, while Argentina was the fastest-growing market, posting topline growth of 39.8% in constant currency to €1.19 billion. Sales in China rose 9.6% in constant currency terms to €177.7 million, while Turkey posted sales of €468.9 million, growth of 1.2% in constant currency.

These figures confirm Brazil and Argentina as markets that are significantly outpacing the sector average. They also underscore the sales momentum in China, particularly in Shanghai.

Brazil, a growth story

The sales momentum achieved in Brazil in recent years confirms the huge potential that lies in store for DIA in this Latin American giant. A giant economy and a giant land mass, so far DIA is only present in two states, Sao Paulo and Rio Grande do Sul, where it opened 81 new stores in 2012, to leave the total store network at 561 at year-end. In 2013 the company plans to tackle a new state, Minas Gerais, with a dozen stores. This region is attractive not only on account of the size of its population and sales potential, it also presents compelling synergies with the infrastructure already in place in Sao Paulo.

15 years in Argentina

Last year DIA celebrated its 15th anniversary in Argentina, an event marked by notable milestones. DIA opened store # 559, making it the supermarket chain with most points of sale in Argentina. DIA expanded its Argentine footprint by entering a new province, Salta, giving it a presence in six of the nation’s 23 states. The sales growth sustained implied the need to add a fourth distribution centre, with plans to open a fifth already in the pipeline. The creation of the chain’s Facebook profile opened up a new customer communication channel

Prioritisation of the Shanghai business

In 2012 DIA decided to sell its Beijing business and to focus on the Shanghai region, the city benefitting from the highest number of store openings last year, along with those opened in the nearby towns of Wuxi and Suzhou. The franchise regime played a very prominent role in this expansion, with more than 40 franchise store openings in 2012. DIA also launched its Club DIA loyalty programme and set up a new supplier portal in China last year.

Competing with everyday low prices in Turkey

5.2.3 France

France

Sales in France declined by 7.5% to €2.45 billion. Nevertheless, adjusted EBITDA rose by 5.7% thanks to the new efficiency measures rolled out and the growing contribution by the franchised stores which currently account for 29% of the French store network.

Last year DIA France completed the switchover of its stores to the DIA Market and DIA Maxi formats. Towards the end of the year it inaugurated the first DIA Fresh store, mirroring the successful fresh produce and perishables format which has proven successful in the Spanish market.

Under the umbrella of DIA’s customer retention strategy, the number of Club DIA cardholders surpassed the four million mark just two years after the card was first launched in France.

In 2012 DIA France secured several important agreements with its suppliers. On the one hand, French law dictated that the company reach new agreements with its main suppliers in France by 1 March 2012. This process was concluded successfully, with 149 agreements signed by the required deadline. Elsewhere, the company began to offer its suppliers new management services which imply advantages for both parties, including payments by bank transfer, administrative traceability, prompt payments and cash forecasting tools. As many as 220 suppliers availed of these services.

Edit:
DIA, S.A.
Parque empresarial de las Rozas - Edif. TRIPARK
C/ Jacinto Benavente 2 A 28232 Las Rozas. Madrid - España

Production and coordination:
DEVA | Comunicación financiera y sostenibilidad

Design:
STROCEN.COM | New Corporate Design

Web development:
efe6 <Rebuilding ideas/>

Photography:
Jesús Umbría / DIA