Dia, the Spanish-based discount retailer, has announced mixed results for the second quarter of this year.
Gross sales fell by 2.7 per cent from the same quarter in 2013 to around €2.3 billion. Dia said that a large portion of this decline can be attributed to the depreciation of the Argentinean peso and the Brazilian real.
In Spain and Portugal, which account for around two thirds of sales, gross sales for the quarter decreased by 2.9 per cent to €1.52 billion. The company said that this can be attributed to the strong deflation that is being experienced in Spain, which is affecting all retailers.
On the plus side, Dia's gross sales in emerging markets such as Argentina, Brazil and China rose by 29.5 per cent in local currency terms.
Its underlying net profit also grew by 5.3 per cent in the first half of the year, to €102.5 million.
Ricardo Curras, chief executive officer of Dia, commented, "The second quarter of 2014 has shown an improving trend in terms of LFL sales, both in Iberia and emerging markets, adjusting for the calendar effect. This is a great achievement in a very deflationary environment across Europe. Deflation has been especially strong in Spain, where the total food retail market decreased by 4 per cent, compared with Q2 2013. Although we expect deflation trends to remain in the third quarter, we foresee some improvements for the last quarter of the year.
"We are experiencing faster growth in Iberia and more rapid expansion in emerging markets, where we are opening more stores than ever. These dynamics should undoubtedly be reflected in steady share gains in our markets."
Dia has undertaken quite a bit of restructuring in the past year, agreeing to purchase its Spanish rival El Arbol while selling its struggling Turkish and French businesses.
Dia currently operates 6,598 stores, including 407 stores that opened in the past 12 months.
© 2014 European Supermarket Magazine by Nicole Gernon
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