Argentina: DIA plans super low prices, more private label products and discounts

Discount Retail Chain DIA's (listed ad owned by LetterOne) global CEO of the Spanish discounter chain, Stephan DuCharme, will invest US $ 115 million in over the next three years. What is his strategy, in a context of inflation, falling consumption and price controls. And he says: "We have been in the country for 25 years: we have gone through everything"

"We have been in Argentina for 25 years: we have already gone through everything," says the executive, about the disbursement that the company will make in the country in the next three years. At the national level, the Spanish chain plans to disburse US $ 115 million until 2023 and generate 3,000 new jobs, between direct and indirect jobs. With super low prices, the expansion of its own brand portfolio, more fresh food and personalized discount coupons, DIA seeks to become the neighborhood store where consumers can make all their purchases in one place.

"We aim to create proximity spaces that bring together fresh and warehouse products in the same place, as is already the case in several of our points of sale. We want to replicate the concept in more stores," explains DuCharme, who assumed this position in May 2020 .

To this end, the capital injection will be used, mainly, to open 263 proximity stores (which will be added to the current 904) and the remodeling of 370 existing ones, an initiative that it launched at the beginning of the year to expand its presence local and differentiate itself from the competition in the seven provinces in which it operates: Buenos Aires, Entre Ríos, Corrientes, Santa Fe, Chaco, Jujuy and Salta.

For now, the next stores that will open will be franchises, a system that the brand relaunched in November 2020, with the aim of improving its service and attention. In this sense, it plans to end 2021 with 60 openings, double the number originally planned. There are already five in operation with the new scheme and the remaining 55 will be inaugurated before the end of the year. They represent 70% of the network of stores in Argentina.

"Franchisees play a fundamental role in our growth. We want them to be merchants who live in the area where the stores open. They know their neighbors and their needs better than anyone. The intention is to focus on the opportunities that the plazas present. where we are present to take advantage of geographic concentration, and thus make logistics more efficient ", explains the CEO Stephan DuCharme.

This commercial format implies a structural change, not only in the image, which includes the refresh of the façades and the gondola equipment. In an inflationary and regulated economy like Argentina, cost control and process efficiency are key to ensuring low prices.

"It is about making the operation more efficient with a simple model that optimizes costs and an assortment based on what the customer demands, working together with suppliers to maintain quality", sums up the essence of the new axis.

"We optimize", he replies, when asked how he deploys his strategy in a context of inflation and price controls, fundamentally, in basic necessities, such as those sold in his stores. That, however, also opens up opportunities. In a context of falling consumption and loss of purchasing power, more and more customers are looking for alternatives to lower their purchases. Attentive to this, in the next two years, DIA will increase its own brand portfolio by 50%, which has a key weight in its sales: it represents 35% of its tickets.

The offer includes more than 1000 sweet and savory products, frozen, drinks, perfumery and cleaning; and more than 75 without TACC, suitable for celiacs. They are manufactured by 200 SMEs, mostly from the province of Buenos Aires, with which the development is jointly defined. He plans to add around 500 items.

In line with the new