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Retail

Dagrofa 'Well On Its Way' To Achieving Business Turnaround

Danish retailer Dagrofa has posted an operating profit of DKK 200 million (€26.8 million) in full-year 2019, which is up DKK 87 million on the previous year.

The group, which operates the Meny, Spar, Let-Kob and Min Købmand banners, said that it is 'well on its way' in terms of delivering its three-year recovery plan, aimed at turning 'several years of deficit' into a profit.

Business Turnaround

The company said that posted a loss after tax of DKK 122 million for the year, however this is an improvement on the DKK 593 million loss it reported the previous year.

It said that the improvements in performance are a result of the #StærkereSammen (Stronger Together) strategy, which was recently introduced by the group, and aims to improve its efficiency and operating systems.

Commenting on its performance, Dagrofa Group CEO Tomas Pietrangeli said that the group was "pleased with its progress", but has yet to hit its targets.

"The results show that our group is on the right track and that the #StærkereSammen strategy works. Our stores and grocers' earnings have improved, which has led to an improvement in Dagrofa Foodservice, and we have been better at utilising our skills across the business."

Dagrofa operates 550 grocery stores across Denmark, as well as the Dagrofa Logistik and FoodService Denmark businesses.

Business Initiatives

Among the initiatives introduced in 2019 were a streamlining of the value chain, through the integration of IT, HR and salary functions, as well as the integration of specialist companies and logistics businesses into the group.

The year also saw Dagrofa utilise cross-border competencies, with two large three-year contracts with fuel chain Q8 (worth DKK 600 million) and the BC Hospitality Group (worth DKK 75 million).

It also engaged in 'targeted work' on in-store improvements, as well as strengthening partnerships and strategic supplier collaborations, it said.

Looking Ahead

The group said that the COVID-19 epidemic is likely to weigh on its 2020 performance, particularly in foodservice, saying that it is 'not clear to what extent the increase in the retail trade could offset the significant reduction in the foodservice business'.

"While grocers are busy maintaining food supplies for Danes during these difficult times, our foodservice business is experiencing the same difficult conditions as the cafés, restaurants, hotels and canteens we service," Pietrangeli added. "Thanks to the improvements in 2019, we are better equipped to meet the challenge and uncertainty of COVID-19."

© 2020 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.

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