DIA has 4,687 suppliers worldwide, marking year-on-year growth of 24%, driven by new format innovation and the strategic commitment to building an omni-channel presence. The trading environment was enhanced by the creation alongside the Intermarché group of CINDIA, a new buying pool in Portugal, and the alliances struck with Eroski and Casino to improve bargaining power (albeit with each company retaining totally independent sales policies). These agreements have the effect of broadening the retail market for the suppliers while simplifying the process of negotiating with the various chains.
DIA selects all its suppliers using criteria related to their competitiveness, product quality and buying terms and conditions and prioritises local suppliers when it comes to shaping its ranges of private-label and perishable goods. As a result, at year-end 2015, 86% if its suppliers were local companies that supply its national divisions in each of its five operating markets.
In 2015, the percentage of local suppliers was particularly significant in the group´s emerging markets: China (100% of the total); Argentina (98%); and Brazil (97%). In Spain and Portugal, these percentages were also a significant 88% and 56%, respectively.
Commitment to name brands
In 2015, the creation of La Plaza de DIA, development of DIA Maxi–both initiatives marked by the introduction of a broad range of fresh products, wines and spirits -, expansion of Clarel and the shift in the online business towards non-food products fuelled the development and presence of name brands alongside its own brands on its store shelves.
Purchases from name-brand suppliers exceeded €4.5 billion in 2015, year-on-year growth of 16%. Purchases from private-label brand suppliers, meanwhile, topped €3.3 billion, up a slight 1.9% from 2014. The mix between name brands and private-label brands was 57% vs. 53%, respectively.
Purchases from name-brand product suppliers rose by 26% year-on-year to account for 53% of the total in 2015, compared to 48% in 2014. Group-wide this percentage increased by 16% from 54% of the total in 2014 to 57% in 2015.
Expansion of the scope of the whistle-blowing channel
DIA’s relationship with its suppliers is based on respect and ethical professional conduct, underpinned by the principles enshrined in the group’s Ethics Code. In 2015, the company set up an ethics whistle-blowing channel for suppliers and franchisees to handle enquires and requests for information. It is managed by the Ethics Committee and aims to resolve interpretation-related queries and unearth any potential code breaches.
Although the Ethics Code is not binding upon its suppliers, the company does expect its suppliers to foster labour rights, respect the environment and take action to prevent bribery and corruption. For this reason, all supplier contracts include a clause stating that DIA upholds the United Nations Global Compact.
In addition to its everyday business dealings with suppliers, the group began to open up alternative communication channels. DIA Argentina organised its first Supplier Summit in Buenos Aires, inviting name brand and private-label brand suppliers. The event was divided into two sections: the morning session was organised around the name brand suppliers’ sales directors, managers and executives; the afternoon session was for DIA brand suppliers’ sales directors, managers and executives. At the end of each event, prize-winning suppliers received awards.