Case Study 2

EREA helps Supermarket chain increase Sales, Back Margin and reduce Costs

  • A major supermarket player in a fragmented market
  • The company is in critical situation, mainly due to a deterioration in the country’s economic situation, investment policy in recent years, and excessive operating spending.
  • The annual debt service is several times EBITDA.
  • The client seeks the help of EREA to improve their P&L

Improve the company’s sales; renegotiate trade terms with CPG suppliers. Implement a plan to reduce operating expenses, which together with the improvement of sales will allow the company to improve its EBITDA

  • EREA focused on supplier negotiations, promotional campaigns to bring back traffic to the stores, an optimization of operational expenses at both Corporate and store level.
  • EREA’s interim management team, collaborated shoulder to shoulder with client executives to accelerate results of the P&L
  • Payment terms are renegotiated with suppliers and the average credit terms accepted by suppliers are increased by 11 days
  • Sales grew by +3.2% (compared to -2.0%) in the first half of the year.
  • Market share rose 0.7%
  • Trade Terms with CPG suppliers were renegotiated. An average improvement of 1.03 percentage points was achieved
  • A Plan to save several millions in operating costs was designed, submitted to the Board, and approved
  • Company is finally sold to new retail operator