The arrival of Mikhail Fridman to Dia has caused many changes in the chain, especially regarding the franchise business model that has put many of its oldest franchisees on the warpath. Many of them have been converted, others have closed and even one banner will disappear this year: Every Day.
During the first half of this year, 40 Dia stores were closed in Spain (25 franchises and 15 of their own) and as part of the strategic closure announced for this type of franchise, a total of 78 Every Dia stores closed. In addition, 85 franchises have become their own in Spain, including 18 Clarel stores.
Last September, Dia decided to close one of its franchised brands, Cada Dia. The closure of the 201 stores is being carried out according to the agreement with each of the establishments. The company estimates that throughout 2020 the banner will disappear permanently, after the end of the longest contracts.
This format was focused on smaller populations, especially rural ones, so that the franchisee, without having the need to transform the establishment into a Dia store, can offer brand products. In fact, in some towns it was the only supermarket that existed.
The cessation of the activity of Cada Dia is part of the simplification and unification of the formats and lines of activity of the group, as part of its business strategy and the new transformation plan of the company, which will take more force during the second semester of the year after registering losses of 187 million until June.
“In the second semester we will continue with the transformation plan that is based on the pillars of improvement of the commercial proposal and the franchise model supported by a continuous improvement of operational efficiencies”, explained the president of Dia, Stephan DuCharme, during the presentation of results.
Actually, Dia has 4,041 stores in Spain, of which 1,477 are franchises, almost 300 less than a year ago. As of June 30, 2019, the company had 4,369 stores in Spain, of which 1,863 are franchisees.
From Dia they remember that the news of the new franchise model they have already been implemented in 470 locations in Spain during the first half of 2020, with the goal of reaching 350 locations in the second half of 2020. According to Dia, it is an “improved model based on incentives and focused on the consumer, with key benefits for the business, including the “payment after sale”.
However, assortment changes, price increases or product shortages in certain stores are some of the issues that have put the franchisees on the warpath of the school during the last year.