Eroski to change supermarket banner

Related tags Hypermarket Ahold

Eroski, the Basque retail group, is to rebadge all its 804
supermarket outlets this month after its joint venture with the
Consum group was wound up earlier this year. The company will take
advantage of the change to introduce a new multi-store strategy
based on store size, writes Chris Jones.

The larger supermarkets will be rebadged as Eroski Center, and will group together all the group's modern, out-of-town outlets, while the smaller stores will carry the Ersoki City name and will effectively form a new city centre, convenience store unit.

The new formats and names will be rolled out by the end of April, the company said, and will see all the company's stores trading under the same name for the first time. Previously, only the hypermarkets carried the Eroski name while all the supermarkets were badged as Consum stores - even those wholly owned by the Eroski group.

Eroski was disappointed by Consum's decision to end their partnership back in February​, commenting at the time that it went against the current trend towards consolidation and economies of scale.

But the Basque group now seems more positive about the move, taking advantage of the necessary name change to reorganise its business along three distinct lines (hypermarket, supermarket, convenience store) and to roll out its low price, high quality image into the supermarket sector.

Expanding the Eroski name to all its stores reinforced its quality image, the company said, with supermarket consumers now guaranteed the same level of quality, service and price as their hypermarket counterparts. It also gave greater visibility to the Eroski brand.

The supermarket sector in Spain has grown rapidly in recent years, mainly because it is not subject to the same strict planning restrictions as hypermarkets. Many of the leading retail groups are investing heavily in developing this format, especially Carrefour which operates under the Champion brand there.

Further developments in this sector are likely this year, with Dutch group Ahold planning to sell all its operations in Spain as part of its restructuring programme. The majority of Ahold's stores there are supermarkets, under the Supersol banner, and while this is a relatively small business (the main reason for Ahold's decision to sell) it could bring substantial synergies to existing retailers.

The latest company linked with Ahold's Spanish stores is El Corte Ingles, which operates in the food sector through the Hipercor hypermarket unit but is mainly known as a department store operator. Reports in the Spanish press this week suggest that El Corte Ingles is considering making an offer for 175 Ahold stores in the Canary Islands, as well as other outlets on the mainland.

Other potential buyers include Auchan, the French group which has focused on hypermarkets until now but which could be interested in moving into a higher growth market, as well as Carrefour or Eroski. Newly independent Consum could also snap up some Ahold stores.

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