Day (supermarkets)

Supermarket Dia

Grupo Dia (Distribuidora Internacional de Alimentación, S.A.) is a Spanish company that operates in Spain, Argentina, Brazil and Portugal in the food distribution, household products, personal care and health sectors.

Founded in 1979, it opened its first store in Madrid under the commercial formula of a discount store. This business model is based on a price reduction policy by reducing costs, simplifying the establishment and its management. The company maintains strict cost control thanks to an efficient logistics chain. Its commercial communication policy is based on campaigns in the media, as well as periodic brochures highlighting the products on offer. It has a franchise system that allows individuals to operate a Dia store after making a certain investment.

At the end of 2022, it had 5,699 stores (of which 2,947 were franchises) distributed among Spain, Argentina, Brazil and Portugal. Its number of employees was 33,423.

It is listed on the Madrid Stock Exchange under the name of DIA.

History

The Dia chain was created in Spain in 1979 with the opening of its first store in Madrid at Calle Valderrodrigo 10, in the Madrid urbanization of Saconia. It quickly undertook an ambitious international expansion plan, which led it to be present in Argentina, Brazil, Greece and Turkey under the Dia banner, in Portugal under the Minipreço banner and in France under the Ed banner in addition to the Dia banner (the Ed banner was eventually replaced by the Dia banner). In 2003, it landed in China, where the number of openings in one year reached 300 stores.

In 2007, Carrefour, then Dia's parent company, bought the Plus supermarket network in Spain to integrate them into the Dia chain for 200 million euros.

In 2010, he sold the business in Greece. and in 2011, Carrefour (owner of Dia since 2000) decided that it would spin off 100% of Dia and take the company public. The operation was carried out by delivering to the current shareholders of Carrefour a number of Dia shares proportional to those they owned in the parent company.

The IPO became effective on July 5, 2011 and on January 2, 2012 Dia became part of the IBEX 35 index. It would leave this index on December 24, 2018.

In 2013, he sold the business in Turkey for 31 million euros.

In 2013, Dia ceased to be part of the ACES employers' association, where Carrefour Market and Supercor are located, to become part of the ASEDAS employers' association, where Mercadona is located.

In 2013, it completed the acquisition of 100% of the German chain Schlecker in Spain and Portugal, a discount specialist in the home, beauty and health sector, for 70.5 million euros. The chain will have the transfer of the Schlecker brand for two years and then it should proceed to a new name. At the end of that same year, Dia presented the Clarel brand, specialized in the sale of personal care, beauty and home products.

In 2014, it sold the business in France to Carrefour for 644.7 million euros. In Spain, it bought the El Árbol supermarket chain for one euro. In exchange, Supermercados Dia took over the debt of El Árbol.

As of September 2015, it acquired 144 stores from Eroski located in Castilla y León, Madrid, Andalusia, Extremadura, Ceuta, Melilla and the Canary Islands for 135 million euros, strengthening its position in the Spanish market. The cooperative stores affected by the agreement were Eroski Center, Eroski City and Caprabo. Said agreement is expandable up to 160 stores. The acquired stores were transformed under the La Plaza de Dia banner, created for this purpose.

Similarly, in January 2016 it was announced that the El Árbol brand would be eliminated that same year. Part of the stores would be operated under the Dia Market brand, while the rest would become La Plaza de Dia.

In November 2016, it landed in Paraguay, initially opening 22 stores, in franchise mode with a local partner, with goals to expand to 90 stores in the following years.

In August 2018, it permanently left China after completing the sale of 100% of its business to Nanjing Suning.Com Supermarket, belonging to the Chinese group Suning.

On December 12, 2018, it announced that it was preparing a capital increase of 600 million euros —more than double its market capitalization— to “strengthen the group's capital structure”. The company would thus obtain new funds with which to face the great financial and results crisis that it is going through, which had caused it to lose close to 90% of its value on the Stock Market during the year. At the same time, it was finalizing a renegotiation of its debt with several banks.

In April 2019, Grupo PRV, owner of the Citymarket local supermarket chain, announced the purchase of 100% of the share package of Distribuidora Paraguaya de Alimentos S.A., a company that operates 26 local supermarkets in Paraguay under the Dia brand.

On May 17, 2019, LetterOne, a company controlled by the Russian oligarch Mikhail Fridman, became the owner of 69.76% after the Takeover Bid (OPA) of the Dia supermarket chain. Until then, LetterOne had 29% of the supermarket chain's share capital. From that moment on, the company established a roadmap to carry out a deep transformation process that would lay the foundations for future growth based on: operational excellence, new value propositions and commercial offer, and a structure of solid capital to meet the challenge.

Between May 2020 and August 2022, Stephan DuCharme was CEO of Grupo Dia. In August 2022, Martín Tolcachir, until then CEO of Dia Argentina, was appointed Global CEO of Grupo Dia.

In August 2021, a capital increase was completed for a total of 1,028 million euros and LetterOne now owns 77.7% of Dia's capital.

In March 2022, it was announced that Mikhail Fridman left the board of directors of LetterOne, the investment fund that controlled 77.7% of Dia's capital, after appearing on the list of oligarchs to whom the Sanctions imposed by Brussels in response to Russia's invasion of Ukraine. For his part, Dia denied that any natural person controlled the company.

In August 2022, an agreement was announced with Alcampo for the sale of 235 medium-sized supermarkets in eight autonomous communities for a maximum price of 267 million euros. The operation also included the transfer of two logistics warehouses in Villanubla (Valladolid). Dia argued that the supermarkets sold to Alcampo, with an individual area of about 760 square meters, did not fit with its strategy focused on local establishments and neighborhood stores. This included stores with the brand La Plaza de Dia, Dia Maxi or Dia.

In December 2022, the sale of Clarel por Dia to the Spanish fund C2 Private Capital was announced for 60 million euros. The sale is expected to close definitively in mid-2023.

In March 2023, the National Commission for Markets and Competition (CNMC) authorized the sale of 224 establishments to Alcampo, 11 fewer than initially planned to avoid monopoly in certain areas. Said transaction is expected to close in July 2023.

Commercial policy

Proximity and closeness are the basis of the Company's business model in the four countries in which it operates. Its multiple physical points of sale allow Dia to meet the recurring demands of its customers. Grupo Dia also offers all its customers the online purchase service in Spain, Portugal, Argentina and Brazil, through its own website or specific agreements with third parties where the Company has with a market place. In addition, Dia has partnered with express home delivery companies, allowing purchases to be delivered to customers' homes in less than an hour.

Its network of franchisees, which represent 43% of the total store network (in 2019 it was 44%), makes Grupo Dia the leading franchise company in Spain by turnover and number of stores, and the sixth franchising company in Europe in the food sector (Source Franchise Direct). The Dia franchise has been strengthened through a new management model that seeks to provide greater security and financial independence to the franchisee, in order to achieve a fairer system that places the franchisee as Dia's true business partner.

The company's commercial offer tries to combine an attractive and quality own brand, which has more than 30 years of history, with an adequate and balanced assortment of quality products from international brands. The supply of fresh produce is crucial in Dia's business model, especially fruit and vegetables.

Dia's suppliers, mainly local, are chosen with strict quality and food safety criteria. Together with them, and thanks to a logistics distribution system that has 31 warehouses around the world (31 warehouses also in 2019), Grupo Dia manages to supply its network of stores on a daily basis so that they have the best assortment at all times.

Types of establishments

Interior of a Dia supermarket.

During its expansion stage, the company opted for different banners and formats to respond to the needs of its customers in the various markets in which it was present.

In 2022, it announced its decision to bet on a single format as a proximity store model. In addition to the stores renovated with the Dia banner, the company owns establishments with the following brands:

• Dia Market (in extinction): it is a model of proximity. Dia Market stores have an area of between 400 and 700 square meters with a large capacity to adapt to the needs of local demand. The perishable bet is particularly remarkable.
• Dia Maxi (in extinction): it is the largest store in Dia with a surface that can reach 1,000 square meters and also offer the possibility of parking for the customers. Its dimensions are often located in the surroundings of the urban centres.
• Dia & Go (in extinction): it is a model of convenience stores, with a wider schedule. It's in extinction.
• The Plaza de Dia (in extinction): The Plaza de Dia represents the concept of traditional, familiar and proximity supermarket in which the customer can complete the needs of his daily purchase with a wide variety of assortment, with special relevance of fresh products. Most of these stores have been sold to Alcampo.
• Clarel: the business unit the Group in the segment of beauty, personal care and home, was born as an independent teacher in 2013, after the purchase of Schlecker stores in Spain and Portugal. In December 2022, the company announced that it has reached an agreement with C2 Private Capital S.L, estimated at 60 million euros, for the sale of Beauty by DIA S.A.U., a company that operates the Clarel business within the framework of its strategy of betting for proximity. The agreement reached includes 1,015 Clarel stores distributed throughout the country and three distribution centers, in addition to other assets.
• Minipreço: teaches with which Dia operates in Portugal. There are proximity stores that are located in urban centers and larger shops that are in the city suburbs.

In recent years, it had brands such as Dia Fresh, Fresh by Dia, Max Descuento, Cada Dia, Shop Dia or Mais Perto (in Portugal).

Business in Spain

Dia's history began in Spain in 1979 with the opening of its first store in Madrid at Calle Valderrodrigo 10, in the Madrid urbanization of Saconia. At the end of 2022, it had 3,789 stores in Spain (of which 1,598 were franchises).

Both the company's own stores and the franchised stores offer fishmonger, butcher and delicatessen services. Contrary to the majority belief, it does not have a uniform price system, except for the offers in the brochures, which are mandatory for the entire network. The same differences can be found between establishments in a capital on the outskirts of a large city or in smaller towns. However, it can be verified that they do move in a price range.

Business in Argentina

Dia arrived in Argentina in 1996 and the following year opened its first store located in the Villa Devoto neighborhood. In 1999 it opened the doors of its first distribution center in the town of Vicente López and today it has a second Center in the Burzaco area, one in the town of Hurlingham and another on the outskirts of Paraná. Since his arrival in the country, the expansive process has grown year by year. Currently, it is present in the city of Buenos Aires and 6 provinces: Buenos Aires, Santa Fe, Córdoba, Salta, Corrientes and Entre Ríos.

At the end of 2022, the company had 912 stores in Argentina (of which 648 were franchises). In mid-2018, the brand launched its website in Argentina nationwide, both for food and technology, naming it « Online Day».

Shareholders

In August 2021, the main shareholder of Supermercados Dia was the conglomerate of investment companies LetterOne, with 77.7% of the share capital.

Disputes and legal cases

In January 2016, between 60 and 80 franchisees from different parts of Spain, after going bankrupt, began a legal offensive against Dia, accusing the company of “fraud, document falsification, misappropriation, computer crime, coercion, threats and psychological abuse.”

Franchisees and former franchisees in Spain and Argentina denounced that the company defrauded them through the inventory system and that it does not compensate them for what was sold at a discount, which led them to get more and more indebted to the company to sustain the business, until bankrupt. Failure to comply with the company's promises regarding the percentage of profit, etc., and abusive practices are also denounced.

The complainants maintain that the company uses the franchise system to get rid of its legal responsibilities towards the franchisees and, especially, the other workers.

In Argentina, the owner of a franchise managed to get the supermarket to admit that it had used her covertly and compensate her.

To date, both the National Competition Commission and the National Court have rejected the initiation of proceedings in this regard.