Spanish retailer DIA has posted a like-for-like sales decline of 0.4% in its core Iberia operations in the first half of its financial year, with the group reporting gross sales of €4.6 billion for the period.
This is 1.4% higher ex-currency, or 1.8% higher in like-for-like terms.
Commenting on its performance, chief executive Ricardo Currás said that the six month period was the “toughest period for the group since its listing”, noting that like-for-like sales were “weaker than expected” and margins were impacted by the termination of purchasing alliances.
DIA ended its purchasing alliances with Intermarché and Eroski back in April.
Store Upgrades
During the first half of the year, DIA upgraded 903 stores in Iberia, with its new look proximity stores delivering ‘exceptional sales and operational results’, the company said.
Its La Plaza de Dia store format has seen a 25% increase in sales density over he past two years, with the banner posting high same-store sales in the first half.
During the period, it opted to discontinue its Max Descuento, small cash & carry store model, it said.
“We have almost completed our ambitious remodelling plan for the year, with more than 900 stores already upgraded in Iberia with good results,” said Currás.
“We are starting to observe the impact of these transformations in the very positive sales trend in July and we expect to sustain this positive pattern in the second half of the year, when we also plan to open new DIA, La Plaza and Clarel stores.”
International Performance
Internationally, DIA saw a 5.0% increase in like-for-like sales, building on a 10.4% like-for-like gain in the first half of last year.
“Argentina experienced big currency depreciation in Q2 2018. In this environment, our business is getting stronger by the day, gaining market share and growing operational profit,” said Currás/
“In Brazil, the good sales performance seen since March continued until the transport strike massively impacted our operations. DIA’s lean supply chain and geographical concentration was hit hard, with very high out of stocks in May and June, leading to a significant negative impact on sales and profitability in the quarter. Since July, business has returned to normal.”
The group added that a strategy review process that was announced at the most recent AGM has ‘progressed very well’ and will be presented to the market in October.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
