Caprabo expands despite stagnant sales

Caprabo, Spain's fifth largest grocer is planning to open several new stores nationally. The expansion plan is announced simultaneously with a report of stagnant sales for 2007.  Caprabo reported sales of €2,188 million for 2007 - a decline of 0.3% compared to 2006. These are the first results for Caprabo since joining Grupo Eroski last year. Despite the negative figures, the Spanish retailer will open seven new stores in its home region of Catalonia and 50 new stores is planned over the next four years.

Re-brand
Eroski plans on more intergration for Capabro, with stores outside the regions North Madrid and Catalonia being remodeled and re-branded under the Eroski City and Eroski Center banners throughout 2008. Over the next few months Caprabo will invest €34 million in price cuts and the chain's private label taken off shelves to make way for Eroski-branded products. The reshuffling of the chain's private label is part of the group's ongoing integration strategy. Stores in the north of Madrid and Catalonia will remain under the Caprabo fascia due to the prominence of the brand in those areas.

Eroski
Parent company Eroski has high hopes for its newly acquired supermarket chain, which makes up a quarter of the group's total turnover. Grupo Eroski reported a 19% sales increase for 2007 to €7,642 million, despite the fact that Caprabo's sales were not fully integrated into the 2007 results. On the other hand, dark clouds are on the horizon as Spanish consumers begin to feel the impact of the international financial crisis and the burst of Spain's property bubble.

(Source: Verdict Research)