“We have invested heavily in the quality of our own brand.”

Today is not the same day as it was five years ago, that’s obvious… At what stage is the company’s transformation process?

This is a great moment because in 2023 we will be profitable in Spain. We suffered losses of almost 400 million euros in 2020 when the new team came in, and during these four years of work we managed to turn everything around. Last year we closed with a net income of $122 million. This is our big milestone worth celebrating. We increased sales in each store by almost 50%. We have developed a completely new store concept and new quality in our own brand assortment. We have transformed the company in all areas, departments, processes… This is a total transformation, culminating in profitability. We are a profitable and reputable company.

Do you think the “coup” is complete?

Achieving profitability is a big step, but we still have 14% of stores to move to the new concept. IN retail You will never stop improving and developing because there is a lot of competition. But in fact, in the process of restructuring Dia España, we can say that we are already a different type of company.

The investment in refurbishing the stores and completely revamping the company’s own brand has been significant.

We have reinvested every euro we have earned over the last four years. We recapitalized the company in all key areas. We invested about 110,000 euros in each store. And we’ve invested a lot of money into improving our brand to what we believe is the highest quality private label on the market to create a great product.

Can you value this investment?

This cannot be quantified. We have invested a lot of profit points in product quality.

And in sentences? At the beginning of the year, he said that this would be the year of advertising investment.

We are going to invest about 150 million in promotion this year, and in total over the last four years it was 500 million. This is a year of big investment in advertising because we have invested a lot in quality. The Spanish consumer has a high gastronomic culture; people know what they are buying and value quality highly. For us this was an absolute must and in order to compete we wanted to be the one who offered the highest quality of our brand. Hence, this year the price factor plays a very important role for the economy of families due to the accumulated inflation, so we are going to make a very big effort with this 150 million.

What is the secret of a good strategy? Will 2×1 win?

No no. We are a local supermarket. 2×1 is more long term. During tough economic times, consumers look more closely at the economy and manage it more throughout the month and week. We notice that people come more times and buy a little less. That is, the basket does not decrease, but the frequency increases. Therefore, we do not believe in such savings offers. We believe in providing direct discounts.

Are we heading towards constant advertising competition between supermarkets?

The future lies in personalized promotion, in providing each consumer with what interests him. To achieve this goal, we have been working on technological solutions supported by artificial intelligence for two years, and in the coming years we will generate a highly personalized advertising offer.

Do they help curb inflation?

The last two years have been very inflationary, but we have made every effort not to pass on all of the rising costs of production to the consumer. In this first quarter, we recorded sales growth of 6.2% and volume growth of 6.2%. This means that inflation in our basket increased by 0%. We always try to make these efforts by creating a range that allows people to continue to keep their basket at zero or with as little inflation as possible. We’re going to continue to work on this. Through promotions or giving freedom of choice so that people can make up their own blend… The idea is to stop inflation as much as possible so that people don’t notice it in their pockets.

The government is making sure that they translate the VAT reduction on food into final prices. Are they being implemented?

It was used mechanically. Just like we will strictly apply the increase. The Ministry of Consumer Affairs asked us for specific information about product packaging, how we applied tax incentives and profit margins. We provided him with all the information and we did not have any problems. We cooperate with everything that is asked of us.

VAT is expected to rise again from July 1. How will this affect prices?

The VAT increase will obviously be noticeable for a group of goods. Our position, and that of the entire sector, is that we would like to see this measure extended because it is a savings lever that allows families to consume more without having to limit sales. Such measures always help prevent a slowdown in consumption.

In the current inflation crisis, the distributor’s brand or “white label” has reached record levels. What percentage is in Dia’s shopping cart?

We have 57%. Over the past three years it has grown by 8 points. This is growth above the market, but in addition to promoting the distributor’s brand through the economic context, it responds to the transformation of our own brand. It’s great. Our brand has nothing in common with what it was three years ago. We took all the products apart and made them from scratch. This is why we are not comparable to the rest of the market.

Major manufacturers accuse supermarkets of unfair competition and discrimination on their shelves. What position do you take in this war?

There is a lot of controversy. I am passionate about giving the customer freedom of choice, and this is something that we have been reflecting in the company’s strategy for four years. Our DNA is freedom of choice: 50% of the range is our own brand, and the remaining 50% is the manufacturer’s brand. Complete equality. We must have our own brand of the highest quality in the market so that the customer can choose. Maintaining this balance is the healthiest thing. Different companies use different strategies, and we believe that this balance is most beneficial for the consumer.

The company’s recent development in Spain has been marked by strategic decisions. Relocation of stores to Alcampo, sale of Clarel… Are you planning to release more ballast?

These were necessary sales for the company. There are no more operations planned at Dia España. The portfolio remains stable with 2,300 stores. This is what we expect and do not expect to increase sales. The company is focused on countries that provide growth and where we have potential for growth, namely Spain and Argentina.

Have you been affected by the diplomatic crisis in Argentina?

We, the Spanish company Dia España, are not affected at all by this.

Will this be the band’s first year of black numbers?

2023 has already arrived in Spain and this year I hope that we will continue on the path of growth. We have built a very strong business and are very optimistic about the future.