Results

• Payment terms were renegotiated with suppliers, increasing the average credit terms offered by suppliers by 11 days.
• Sales grew +3.2% (versus -2.0%) in the first half of the year.
• Market share increased by 0.7%.
• Trade terms were renegotiated with FMCG suppliers, achieving an average improvement of 1.03 percentage points.
• A plan was designed, presented, and approved to save several million dollars in operating costs.
• The company was ultimately sold to a new retail operator.

Initial Situation

• A major supermarket player in a highly fragmented market.
• The company was in a critical financial situation, mainly due to:
• The deterioration of the country’s economic environment
• Heavy investment policies in recent years
• Excessive operating expenditures
• Annual debt service was several times higher than EBITDA.
• The client sought EREA’s support to improve its profit and loss performance.

Project Objective

Improve company sales; renegotiate trade terms with FMCG suppliers; and implement a plan to reduce operating expenses, which — combined with increased sales — would allow the company to significantly improve its EBITDA.

Methodology

EREA focused on supplier negotiations, promotional campaigns to bring traffic back to stores, and operational expense optimization at both corporate and store levels.

EREA’s interim management team worked side by side with the client’s executives to accelerate P&L improvements.