Costs reduce Eroski’s profit to 64 million, 38% less

by time news

2023-05-03 18:28:35

Eroski has not escaped the impact of the rise in costs in 2022. Its result, even generating profits of 64 million euros, has fallen by 38% compared to 104 million in 2021. And, as explained by the first executive of the company, Rosa Carabel, the profitability on sales continues to decline “due to the effort that the sector is making in not passing on the rise in costs to the end customer”. According to data presented by the food cooperative, sales last year generated a 7% increase in revenue to reach 5,476 million euros. Some income with which Eroski has had to face an increase in its costs of 15%, while the average purchase ticket in its boxes has risen by 12%. This differential has meant reducing profitability to 1.32% and opens a scenario of price increases that Carabel has assured will be maintained over time “because inflation moderates, but continues to rise.” Expansion with 145 stores The cooperative opened 145 new stores in 2022, 78 in the northern area -Galicia, Asturias, Cantabria, the Basque Country, Navarra and Catalonia- and 67, as franchises, in the rest of Spain. A sales force with which Eroski managed to improve its position in that reference area of ​​northern Spain, reaching a 12% market share and resume strong growth in Catalonia, after the entry into Caprabo of the group of the Czech magnate Daniel Kretinsky. For this year, the expansion plan is maintained with some 85 new supermarkets, a dozen owned and close to 70 franchised. After a payment of 44 million euros to repay debt in 2022, the Elorrio brand is now opening negotiations to refinance 909 million euros of debt. A “normalized” amount on an ebitda -benefits before taxes- of 280 million and after paying 2,514 million since 2009. For this reason, Carabel explained that “selling assets to pay is not part of the equation” and that financing is being faced with operating resources. Although she has qualified that partners are not ruled out, “as we have always pointed out” to strengthen the capacity of Forum, the cooperative’s sports brand, compared to its competitors. Management, and the introduction of efficiency measures, have become an indispensable mechanism in management, as explained by Carabel. And it is that last year 55 million were allocated to reduce the impact of the prices of the products and, in addition, the expense of items such as salaries, energy, rental of premises and transport increased by 36 million euros. These are measures that have reduced profitability, but which, combined with efficiency, have led to an improvement in operating results of 204 million euros, 10% more than last year and the best figure since 2015. “Unheard of” regulatory situation But for the Eroski’s top manager, “the sector is making a great effort and the rope cannot be stretched any further.” In this sense, she has demanded that the Government “slow down all the regulations that it is applying throughout the value chain.” Carabel has denounced that the number of regulations that have been implemented in the last year in food, such as the tax on plastic, is “unheard of”. They are issues, she has explained, that make prices even more expensive. Carabel has taken the opportunity to demand the extension of the measures such as the VAT adjustment, not only in time, but also to other products such as meat and fish. The latter has registered a drop in sales of 15%, she has explained her. This position of bringing the VAT adjustment to these fresh products was already defended by another of the Basque distribution brands, the Uvesco group.
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