Tuesday, April 28, 2020

How coronavirus made the Day supermarket chain back on the internet

Retail experts are categorical in saying that the sector faces a complicated time in 2020 due to the crisis of the new coronavirus. And the situation is even worse for companies that rely solely on their business in physical stores. This was the case of the Brazilian operation of the supermarket chain Dia, which closed its e-commerce in the country in May last year. With poor results in the last year and directly affected by the drop in sales caused by covid-19, the company bets on the digital transformation of its digital business to try to grow again in the country. In numbers, the situation of the Brazilian operation of the Spanish supermarket chain is bad. The company ended 2019 with net revenues of less than 1.2 billion euros in Brazil. This represents a 16.1% drop from net sales of 1.4 billion euros in 2018. The bad numbers can be explained both in the abandonment of e-commerce here and in the closing of 292 stores in the chain. For comparison, the results of the company's business in Spain, Portugal and Argentina fell only 8.2%, 7.9% and 5.5% respectively. To work around these numbers, the company accelerated a plan to resume digital operations. Initially scheduled to be carried out during the year 2020, the plan was executed in just a few days with the consolidation of a partnership with iFood for the delivery of grocery shopping over the Internet. "The medium-term plan has become short-term," says Marcelo Maia, executive chairman of the Brazilian operation of The Day. The plan is to escalate little by little. "Everything that is happening, all these changes have generated a movement parallel to which we have to adapt," maia says. Asked if e-commerce was lacking, mainly because of social isolation, the executive said that the characteristic of the retailer's operation is based on proximity, with customers seeking the network because it is a channel of easy access "even in times of covid". The day's strategy is not new. Industry giants such as GPA and Carrefour have been eyeing this market for a long time. The former acquired the operation of the James Delivery application and transformed the service into its fastest platform for product deliveries. Carrefour, in turn, maintains a partnership with Colombian startup Rappi to bring gondolas products – physical or digital – to residential pantries. With the crisis, new partnerships emerge. "Coronavirus was the biggest accelerator in the process of digitizing companies," says Juedir Viana, professor of retail MBA at the Getúlio Vargas Foundation (FGV). It will still be a long way to go. In the company's financial statement for the first quarter of 2020, Brazil was the country in which the company performed worst. Although revenues of 251 million euros were higher than those recorded in Portugal (149 million euros) and Argentina (236 million euros), the Brazilian operation shrank 23.1% compared to 2019. It was the only one that achieved a deficit in relation to the four markets in which the supermarket operates. Still, it's a start. Digital commerce has become essential in times of social isolation. Even in companies that can still keep their physical operations running. "The new channels have become a must thinking about the future. Not only during quarantine, but also after," Maia said. According to data from the São Paulo Association of Supermarkets (Apas) obtained in a survey conducted with retailers in the state, the growth of e-commerce in the supermarket sector during the last week of March was 107%. In physical stores, the same period recorded a rise of only 10.9% in sales.
Exame - 28/04/2020 News Item translated automatically
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