New challenges in the distribution sector in today's economy
Constan Dacosta, president of Eroski: "Consolidation among retailers and manufacturers will continue in Spain and Europe, even though there has been a hiatus"
Constan Dacosta, chairman of the supermarket chain Eroski, put forward his view on the fresh challenges posed by today's delicate economic situation and their affect on the distribution sector.
In Eroski's 40th anniversary year, along with the half-century of its subsidiary Caprabo, Constan Dacosta recognises that the crisis is offsetting the profitability of the Caprabo takeover, although he did admit to being "optimistic" in spite of the current climate and "satisfied" with the results of the acquisition. As he illustrated, the brand has experienced an "increase in sales" both on a Spain-wide level – jumping from 13% to 18% - and in Catalunya in particular, where market share has grown to 13.5%. He revealed that 93% of customers say they are satisfied, which in part is down to "a range of higher quality products than in the past", he explained.
On a similar note, the Eroski chairman recalled that when the Caprabo takeover was first suggested, the current economic crisis was on the horizon and so perhaps the operation should not have been undertaken at that exact time. Nevertheless, he vouched that it was "a good strategic decision, within a longterm business project, and not designed to be profitable until two or three years' time".
Despite the positive data, Dacosta insisted that full recovery will be "difficult" and "slow". The company had a pre-crisis growth margin of 2-3%, but, he expressed, "it will be somewhat lower now". On this, the Eroski chairman held firm that growth will remain minimal until 2012, but stressed that "we will all come out more client-oriented".
After the crisis, further consolidation
Concerning the future of the distribution sector, Dacosta affirmed that "consolidation among retailers and manufacturers will continue" in Spain and Europe, even though there has been a "hiatus" due to the trend of credit restrictions on financing operations. Along these lines, he highlighted that such "consolidation in distribution has its roots in manufacturers who concentrate distribution, even so, one can't disregard certain wholesalers on store shelves".
During his talk, he also spoke of Eroski's future strategy, acknowledging that the company will study possible takeovers after the crisis, because "to do otherwise would be a mistaken strategy". However, "this will take its time", he added.
New store in Terrassa
Eroski has launched a pioneering project to reinvent the concept of hypermarkets. This week hyperstores are opening in both Cantabria and Terrassa. Dacosta stressed that not only will the new stores début a new look, but also a redesigned layout which will "place importance on the product range and on new spaces".
In Terrassa, a children's play area will be included, as will a personal care section and a fruit section showcasing local produce. He promised that if these pilot schemes work, they will be extended to all other stores.
Programme:
Constan Dacosta, president of Grupo Eroski, will feature this session of Matins ESADE entitled "Distribution challenges in the new competitive environment"
Welcome: Xavier Sanchez (Lic&MBA 97), Director of ESADE Alumni
Introduction and presentation: Oriol Iglesias (Lic&MBA 98), Assistant Professor in the Department of Marketing Management at ESADE
Conference: Constan Dacosta, President of Grupo Eroski
Discussion:
Moderated by Jordi Goula, Economics Editor at La Vanguardia
Closing: Xavier Sanchez (Lic&MBA 97), Director of ESADE Alumni
