Spain's Eroski Posts Pretax Profits Of €40m For FY 2016/17
Spanish retailer Eroski has posted pre-tax profits of €40 million for the full year to 31 January 2017, driven by the success of its 'Contigo' business model and improvements in its supply chain.
Net sales at the group stood at €5.29 billion (ex VAT), which was roughly in line with the retailer's performance the previous year (+0.02%).
The deactivation of tax credits, which follows on from a new tax regime that came into force in December, meant that after-tax, the group's profit was turned into a €22.8 million loss.
Eroski said that it invested €87 million in its business during 2016, much of which went towards reformatting its network of supermarkets and hypermarkets. Some 512 stores at year-end had been converted to the Contigo business model, which focuses on improved customer service, greater focus on fresh produce and sourcing of local products where possible.
The model is also characterised by offering a healthier, 'more sustainable' product range.
The strengthening of the Eroski Club loyalty scheme was also cited as a core driver of the group's performance, offering around €260 million worth of personalised savings to the customer last year, according to the retailer.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.