Finance: Hypermarkets in Spain
In these times of crisis, it is generally assumed that hypermarkets in Spain such as Auchan, Carrefour, Hipercor, Eroski, and El Corte Ingles are struggling to retain their piece of the shrinking European pie.
Let’s take a quick look at the financial situation of the biggest hypermarkets in Spain, which are Hipercor under the El Corte Ingles group, and Eroski which is part of the Eroski group.
According to the financial information provided by El Corte Ingles, the sales turnover and net income of Hipercor hypermarkets in 2010 saw a general decline in contribution as compared to 2009, with a 5.4% decrease in turnover and profit, and a 25.6% decrease in consolidated profit. The decline in net sales and profits was a result of a reduction in prices and margins, as well as structural changes. However, the hypermarket chain continues to hold 14.9% share within the group, being the second largest area of activity after the El Corte Ingles department stores.
On the other hand, Eroski’s 2010 fiscal year managed to yield a 7% increase in consolidated profit and 17% increase in operating profit. A significant cut in prices in order to gain competitiveness and paying back of bank debt, however, resulted in a burden of 70.5 million euros. The increasing rate in unemployment and fall in confidence of consumers and consumption of families due to the economic crisis was seen as the main cause of the decline in its financial figures.
However, Eroski managed to cut some of their long-term and short-term financial debt with the paying off of bank loans, and reinforced measures to cut costs and improve internal management. In order to build consumer confidence, the hypermarket chain launched EROSKI basic, a brand that claims to offer “products of proven quality at very competitive prices”. Eroski’s reinforcement of its competitive prices has represented a saving of over 143 million euros for customers.
It can be concluded that although some hypermarkets in Spain are generally encountering financial decline, some policies and measures have been adopted to counter the drop in profit and gain consumer confidence, while hypermarkets such as Hipercor seem to focus on improving staff productivity and expanding its presence throughout the country, as seen in the opening of a new centre in A Coruña in 2011 as well as diversifying its range of products, such as perfumes, children’s clothes, diapers, and other baby products.
Comments Off on Finance: Hypermarkets in Spain /
27 Nov 2011
por
Syafrina Sharif
IMSD /
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