Dia targets growth with a 70% franchised store model

Dia is putting franchising at the heart of its next phase of growth in Spain. Its chief executive, Ricardo Álvarez, has explained that the company plans to move forward with a model comprising 70% franchised stores and 30% company-owned outlets, having completed the refurbishment of its store network. According to Álvarez, 97% of its stores are now profitable.

Franchising will shape the next phase

Álvarez outlined this approach on 21 October at AECOC’s 41st Fast-Moving Consumer Goods Congress in Seville. In remarks reported by El Independiente, he reviewed the chain’s transformation since he took charge of its Spanish business in 2020 and set out the priorities that will guide its development.

The company is now focusing on stores of between 350 and 500 square metres. This format, together with the planned split between franchised and company-owned stores, defines the growth model presented by the head of Dia Spain.

For the franchise sector, the announcement confirms the role the brand envisages for franchisees in this new phase. The 70% figure is a target for the growth model; it is not a store opening figure and does not indicate how many new franchised outlets will join the network.

This distinction matters when interpreting the announcement: Dia has set out how it wants to continue growing, but that percentage should not be confused with a specific schedule of openings.

From 35% to 97% of stores profitable

The main figure in Álvarez’s review was the improvement in store profitability. He explained that when he took the helm of the company in Spain in 2020, only 35% of stores were profitable. Following the transformation programme, that proportion has reached 97%.

He also said the chain had doubled its average sales. Both indicators accompany the completion of the network refurbishment and provide context for its intention to continue expanding with franchised stores making up the majority.

These figures need to be understood within their stated scope. The profitability claim refers to the stores discussed by Álvarez as a whole, with no specific breakdown between franchised and company-owned outlets. It therefore does not represent the proportion of franchised businesses that are profitable, nor is it a forecast of results for future openings.

For anyone considering joining a network, a brand’s overall performance provides context, but it cannot replace a financial assessment of a specific location. Nor is the proposed floor area alone enough to estimate sales or returns for a new supermarket.

Product range continuity and stronger finances

The commercial strategy retains another clear principle: the balance between own-label products and manufacturer brands. Against a backdrop of inflation, Álvarez defended a 50:50 sales mix and said the company had no plans to change that approach.

Dia’s chief executive highlighted manufacturers’ contribution to sales, innovation and quality. He also thanked suppliers for their support during the chain’s most difficult periods.

On the financial front, the company has reported profits for three consecutive financial years and reduced its debt by €125 million over the past year. Álvarez also said it planned to refinance its debt after lowering its debt-to-EBITDA ratio.

The stronger financial position and continuity in commercial strategy complete the picture behind the announced growth plans. They are not franchise contract terms, but they are relevant to understanding Dia’s position as it prepares for its next phase.

What to check before taking the next step

Dia’s message brings together three points: a greater role for franchising in its growth, premises of between 350 and 500 square metres, and a transformed network with improved performance indicators, according to its chief executive.

For a prospective franchisee, the practical takeaway is to assess those headline figures against the individual project: request the current franchise terms, study the location and review a detailed profit and loss forecast. The improvement across the network is a useful reference point, not a guarantee of results for any future franchise.