El Corte Inglés has launched an anti-inflation plan with which it intends to tackle part of the impacts that it is causing at an economic and business level. The company, in its financial report made public this Tuesday, points out that the “strong sanctions on Russia” have exacerbated the inflationary situation, due to the rise in energy prices, the “disorders” in the supply of raw materials and food, the tensions in the consumption chains or transport problems.
Given this, and to “mitigate the effect” of inflation, the distribution group says it is implementing “improvements in cost reduction.” Here, it points to the “digitization of processes” and the “staff reorganization plan”.
In this last section, we must remember the exit plan with which almost 3,300 company workers left the company a year ago. To these, we must add the 475 of the ERE that Viajes El Corte Inglés agreed with the unions in March of this year. In parallel, the group maintains its partial retirement plan, which affects workers over 61 years of age, and for which as of February 28 of this year, the closing date of last year, it had provisioned 53.2 million euros. In that “reorganization plan” that El Corte Inglés reviews, also includes workers from stores that have closed their doors and who move to others, or are relocated to another activity. From the company any new ERE is discarded.
Energy and logistics
The workforce falls below 80,000 and falls 22% since 2010
Labor. As of February 28 of this year, El Corte Inglés had a total of 79,804 workers on its staff, 1,010 less than on the same date in 2021. The company thus falls below the 80,000 worker barrier for the first time in nearly 20 years. The average number of full-time employees during the year fell to 71,404. It is the lowest figure since the year 2000, when the company declared 68,759 in its accounts. In 2021, the company undertook the voluntary departure of 3,292 workers, and incorporated 412 from Sánchez Romero. Since 2010, when it exceeded 100,000 workers, El Corte Inglés has reduced its total workforce by 22%.
This also includes as a factor in the face of inflationary pressure the activity of its logistics subsidiary, El Corte Inglés Advanced Logistics, with which it wants to grow in this business by providing services of this type to third-party companies. The company says that its creation has the objective of “improving the distribution chain in situations of punctual shortages and disruptions in the supply and distribution transport network.” In other words, a way to avoid depending on third parties in situations of special stress, such as the transport strike last March.
And finally, El Corte Inglés is also trying to stop the rise in energy prices. As explained in the report, it is taking the “timely steps in the face of the increase in energy costs, implementing plans to cover future purchases that allow costs to be reduced and future flows to be guaranteed”. In other words, it is exploring new long-term supply contracts (PPAs, in energy jargon), through its subsidiary Telecor, under which it has framed its entire energy business, such as the new marketer Sweno Energy.
Despite the economic context, the president of the group, Marta Álvarez, explains in the non-financial report that El Corte Inglés “is in a promising situation to face the future”, despite “the persistent effects of the health crisis, the scant recovery tourism and the complex economic environment we live in, with rising inflation, an unusual escalation in the price of energy and a containment of consumption derived from the rise in prices”.
Álvarez adds that “the care of the product and customer service, the continuous improvement of our stores and the development of new businesses […] They are the axes that allow us to grow as a company”.
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