Spain's El Corte Inglés Cuts Prices on 4,500 Products By 20% (Retail)

Source: simbiosc (flickr)
With Spain in all kinds of crises right now (sovereign debt, employment, banking, economic, etc), it's interesting to see what is happening on the field. El Corte Inglés, one of Spain's largest department stores, is cutting prices on 4,500 food and drug items by 20% to compete with its rivals Carrefour and Mercadona. And because people think their products are too expensive.

This company is huge. In 2010 it had a "consolidated turnover" or revenues of 16.413 billion euros, gross operating profit (EBITDA) of 1.017 billion euros, and consolidated net profit of 319.41 million euros (datos económicos).  (translated):

For this, the distribution group cut their margins, consolidate its purchasing center and optimize its internal processes. "We've lowered our margins because we are completely sure that the customer will react and gain in volume," said the director of group purchasing power, Victor del Pozo, who has estimated that sales will grow in a "significant".

Cinco Días (translated):

"90% of our customers tells us we are very good, but they are very expensive," he assured Victor del Pozo, head of group purchasing power of the English Court, in a meeting with the press.

El Corte Inglés press release translated into English:

"El Corte Ingles Group has launched a new pricing policy for the feeding area that affects both fresh as all brands of groceries, meats, dairy, chilled, frozen, soft drinks, wines and spirits as well drugstore items.

The Group has selected the 4,500 most popular products in the basket to set a minimum rate and ensure that their stores are available always highly competitive prices. This price list will be reviewed weekly in all categories of fresh ( fruits and vegetables, fish, seafood, deli and meat) and every fortnight in the area of grocery, drugstore and perfumery. It is therefore a strategic action of a stable and permanent vocation responsive to consumer demands. This new position, which has been implanted in the supermarket of El Corte Ingles, Hipercor and Supercor, has achieved through internal management efforts that the Group has undertaken in recent months. This has allowed better use of synergies between the different formats of the Group, increased efficiency and value for money, while providing the same service and quality assurance which characterizes the El Corte Ingles Group."
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