Spainish Eroski nearly bankrupt
Published: 2013-07-02 Views:
44
Core Tip: With an accumulated debt of 2,830 million Euro, the Basque chain Eroski can no longer compete with current price wars and might declare bankruptcy soon.
With an accumulated debt of 2,830 million Euro, the Basque chain Eroski can no longer compete with current price wars and might declare bankruptcy soon. Causes can be found in reduced consumption in recent years. In 2011 the mega supermarkets in the region of Madrid were sold in a bid to revive the core business, but this was not enough to curb the downward spiral.
From 2008, the company suffered huge losses. The chain did not adapt to the new demands of consumers. A part of the work force, of which 25% was let go, is integrated into other companies. Eroski could not compete with the low prices of its competitors.
Growing debts
To cope with the growing debt, the cooperative has developed a strategy for 2013-2016, which is aimed at reducing costs and lowering prices. A new orientation is toward revised concepts for hypermarkets and convenience stores, and customer loyalty.
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