4.1
Proximity

Modern, convenient and profitable stores

DIA reaches 45 million customers worldwide through its neighbourhood shopping formats – DIA Market, DIA Fresh and the recently acquired Schlecker stores – and its larger-format store – DIA Maxi.

DIA has two distinct business formats that cater to two well-differentiated forms of buying behaviour. The first is the neighbourhood format which brings in shoppers within a radius of 8 minutes by foot and in turn implies frequent low/medium-sized shops. The second is a larger-format store, which brings in customers within a much wider radius; these shoppers come by car, they shop less frequently but buy more.

Both formats have evolved in recent years, taking on a more modern, competitive and customer-focused profile and focusing strategically and decisively on perishables, the key driver of shopping frequency. The inauguration of the DIA Fresh model and the acquisition of the Schlecker stores in 2012 reinforce DIA’s strategic commitment to the neighbourhood segment.

In the last five years the group has refurbished its entire store network, converting all its neighbourhood stores over to the DIA Market format and all its large-format stores over the DIA Maxi model. The changeover is designed to satisfy shoppers’ needs more efficiently. The transformation process has entailed a huge effort in terms of financial resources and human capital, with €350 million of capex earmarked to the process in 2012 alone.

A large part of this effort was designed to minimise the amount of time the stores being refurbished had to remain closed in light of the adverse impact each day of closure has on the company’s sales.

The transformation process also implied the definitive boost to the company’s fresh produce offering. The strategic commitment to meat, fish, fruit and vegetables – the core components of shoppers’ everyday purchases – has meant priority positioning in terms of layout at the point of sale as well as in logistics operations.

DIA Market

The switchover of classic DIA stores to the DIA Market model has given the group’s stores a more modern and updated look and feel.

The dramatic transformation process - in terms of sales proposition and image - began in earnest in 2007 paving way for what is today the most modern network of neighbourhood stores on the market. Many DIA stores, despite having modernised and evolved, particularly in terms of product selection, retained their original appearance after almost three decades in operation in some regions.

The new DIA Market stores come with a more attractive facade featuring a large window which displays the inside of the store, beckoning passersby to drop in. Inside, the stores use new flooring and ceiling materials, next generation lighting and more appealing signage.

In terms of the sales focus, the group has committed decisively to perishables. This has meant devoting more floor area to this product family. For example, the store floor area set aside for fruit and vegetables has almost tripled, while that devoted to chicken and meat displays has nearly doubled. In addition, all DIA Market stores are equipped with ovens, enabling them to offer their customers bread freshly baked on the premises.

The new DIA Market stores combine a more attractive image with enhanced management and competitive gains

It is also worth highlighting another qualitative change at the store level: management of perishables, which currently represent over 14% of stocks compared to under 6% in the past.

This change has not only enhanced the image and management of the DIA Market stores it has also made them more competitive in their bid to garner market share from other supermarkets in the neighbourhood segment.

DIA Market:
DIA Fresh

The DIA Fresh stores fall under the neighbourhood shopping umbrella. They give DIA a new sales model which is allowing it to break new ground and adapt to emerging market demands, with consumers increasingly hard pressed for time and money.

DIA Fresh is a new store model designed to satisfy customers’ everyday shopping needs
This new model is designed to respond to these concerns and to make it easier for customers to do their everyday shopping in stores that are very close-by, open long hours and offer DIA’s trademark price-quality.

DIA Fresh:

The DIA Fresh stores are intended for city and town centres in handy locations. With a smaller floor area than that of a DIA Market store, they sell over 1,000 SKUs and are staffed (4-6 employees per establishment) with specialists in handling fresh produce.

The face of these new stores is modern, fresh and inviting, foreshadowing a pleasant shopping experience. The DIA Fresh concept injects the colour green into DIA’s trademark red, to symbolise the fresh and natural food within.

These establishments have a number of specialist sections in which shoppers can find ready-to-eat foods, pre-packaged meat and fish, baked goods, fruit and vegetables and sweets. They also have a section containing a small selection of basic necessities and - one of the newest developments - pickled products by the kilo.

DIA Fresh
DIA Fresh Facade of the first DIA Fresh store, inaugurated in April 2012

The first DIA Fresh store was inaugurated in April 2012. Since then, the group has opened 18 stores in Spain’s main cities, including Madrid, Barcelona, Seville, Valladolid and Cadiz. Towards the end of the year the company began testing the suitability of this model for the French and Portuguese markets. Meanwhile, management plans to accelerate the pace of DIA Fresh store openings in Spain in 2013 and to open the first DIA Fresh store under the franchise regime.

Schlecker acquisition

DIA’s strategy is to lead the neighbourhood segment and in 2012 it took another step to round out its neighbourhood offering, acquiring the Schlecker chain in Spain and Portugal (a transaction approved by Spain’s anti-trust authority, the CNC, on 27 December 2012). Schlecker is a discount retailer specialised in the household, health and beauty products segment. Its integration into DIA’s store network will add 1,127 outlets in Spain and 41 in Portugal, as well as four distribution centres.

This €69.3 million acquisition closed on 1 February 2013. DIA has acquired 100% of the company. This acquisition presented the group with a unique opportunity to grow and reinforce DIA’s leadership position in the neighbourhood shopping segment, adding a retailer specialised in products that complement DIA’s current product offering.

Schlecker:
DIA MAXI

Throughout 2012 the group continued to switch its large-format stores over the DIA Maxi model, introducing significant changes in terms of the sales mix, store image and layout, mirroring the strategic shift in the DIA Market stores.

The DIA Maxi store model is targeted at households that tend to do less frequent but bigger shops
The successes reaped have encouraged and enabled the group to accelerate the transformation process; management currently expects 100% of these establishments to be refurbished by the end of 2013.

This model is targeted at households, families mainly, which tend to do bigger but less frequent shops. To this end, they sell larger format products as well as product families such as clothing and household goods that command a smaller shelf presence in other DIA store models.

DIA Maxi:
DIA Maxi:
Loyalty card

The Club DIA loyalty card is another tool in the company’s strategic arsenal of neighbourhood shopping services as it enables it to learn more about its customers’ needs, tastes and preferences so that it can tailor special offers for each shopper.

In 2012, 70.3% of DIA’s sales were made using the loyalty card, consolidating its role as a crucial driver of the company’s growth and business development.

The Club DIA loyalty card was first introduced over 15 years ago; today it has over 30 million members
This loyalty programme, launched over 15 years ago, currently boasts over 30 million users worldwide, having been introduced in Turkey in 2011 and in China in 2012. In 2012 it delivered €151.5 million of discounts to loyal DIA shoppers. Despite idiosyncratic shopping habits in the group’s various markets, the Club DIA card continues to prove that it is a valid and exportable model which keeps on signing up new adepts in the group’s operating markets year after year. Last year nearly three and half million new members signed up for the card, year-on-year growth of 12.7%, broken down as follows by country: 900,000 in Spain, 800,000 in France, 500,000 in Argentina, 300,000 in Portugal and over one million in Turkey.

The Chinese experience is worthy of special mention: launched in December 2012, the Club DIA card signed up 23,843 members in its first three months in the market. In 2013 the group plans to introduce the club card advantages in another of the world’s fastest-growing economies: Brazil.

As part of its strategic commitment to continual innovation, DIA is using its loyalty card to tap into the possibilities opened up by the internet and emerging digital technologies to interact with its customers. To this end it has set up a website where shoppers (the website has over 140,000 registered users in Spain and there are plans to go global with the concept) can get discount coupons and sign up for a newsletter that is sent out to card members’ email addresses. The group is planning to start to send coupons to customers’ handsets and to develop a smartphone application in 2013.

Loyalty card
Loyalty card

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