Cristina Alonso Madrid

Madrid

Updated Friday, March 1, 2024-02:07

The

Dia Group

concludes the transformation phase and is arming itself with a

million-dollar investment for the promotion war

that is intensifying among the large distribution chains with food inflation still skyrocketing.

This shift in strategy in one of the

core

markets such as Spain, together with the retreat in points on the world map that have been weighing down its accounts in recent years, will allow the company to leave the red numbers behind and head towards profit. in 2024 for the first time in seven years.

"Spain and Argentina are producing positive net results, unfortunately weighed down by the Brazilian results. The group maintains a good trend of recovery of net results, with a reduction in losses of 75% last year compared to 2022 and 90% if "It is compared to 2021. We believe that

the group is working to return to positive territory shortly

," said Guillaume Gras, financial director of Grupo Dia, yesterday in a meeting with journalists to assess the results for 2023.

Indeed, the accounts deposited with the CNMV reflect a reduction in losses to 30 million euros thanks to the good performance in

Spain

, where it managed to make profits with 122 million, and in

Argentina

, where it obtained a positive result of 6 million euros.

However, in

Brazil

the company recorded losses of 154 million that hampered the group's results globally and opened the door to exiting the South American country.

"Taking into account the performance in Brazil, the group is analyzing

various strategic alternatives

, with the aim of making a decision in 2024," the company reported.

If we let go of that burden in the current year, as it did with Portugal last year, the group would be in a position to return to the

black numbers

, something that has not happened since 2017. "We have made the appropriate decisions to simplify our portfolio, which will allow us to focus our efforts on the markets in which we have the potential to grow under our single banner. The milestones achieved in Spain and Argentina conclude the turnaround phase

and

allow us to begin a phase of organic growth always focused on offering our clients a first-class experience," said the group's global CEO, Martín Tolcachir.

In this new phase, the promotional strategy is going to be key.

Although inflation in Spain has now entered the realm of containment, food prices continue to skyrocket and customer loyalty remains crucial to gaining market share.

"It is going to be a very promotional year," Ricardo Álvarez, CEO of Dia España, told the press, who quantified the extraordinary investment in promotions planned for 2024 at 150 million euros.

This investment has translated, since the beginning of the year, into weekly discounts on more than 200 products, with a special focus on

Club Dia

members , who can enjoy personalized offers and promotions of up to 40%.

In addition, the company has relaunched its own brand line, which they estimate can lead to savings of up to 25% in annual shopping cart spending.

And it continues to forge alliances with companies such as

Mapfre, Endesa or Booking

to offer discounts to Club Dia clients who hire their services.

Lidl

has been the latest company to break into the promotional war.

This same week, the German

discounter

has announced a permanent price reduction on up to 200 products.

Mercadona and Carrefour began the battle with similar discount campaigns on half a thousand references in their assortments.

The objective: to offer the cheapest basket to retain customers through promotion and maintain and even gain share in an increasingly competitive market.