Irish convenience group ADM Londis has cut credit lines to more than 40 stores to help it cope with the economic downturn.
The outlets involved were described as "exposed stores" where there was a risk the group would not be paid for products. As a result of the cutbacks, group revenue fell by 21% last year and ADM Londis is now supplying just over 300 shops, down from 350 a year ago. Despite falling sales, the group made a 2.4m pre-tax profit last year, although this was half the figure for 2008.
A review had led to a 15% cost reduction across the group, said chief executive Stephen O'Riordan, with the loss of 10 jobs reducing staff numbers to 70.
"There has been price deflation on food of about 8%," added O'Riordan. "Consumer spending is down, people are shopping around and retailers have to compete on price. There was a premium being paid for convenience, but that is gone now."
He added that a recently signed strategic alliance with Nisa-Today's would be a key factor in driving future growth. He said the deal "has given us access to more than 6bn of buyer power and helped our retailers compete with the larger multiples".
The outlets involved were described as "exposed stores" where there was a risk the group would not be paid for products. As a result of the cutbacks, group revenue fell by 21% last year and ADM Londis is now supplying just over 300 shops, down from 350 a year ago. Despite falling sales, the group made a 2.4m pre-tax profit last year, although this was half the figure for 2008.
A review had led to a 15% cost reduction across the group, said chief executive Stephen O'Riordan, with the loss of 10 jobs reducing staff numbers to 70.
"There has been price deflation on food of about 8%," added O'Riordan. "Consumer spending is down, people are shopping around and retailers have to compete on price. There was a premium being paid for convenience, but that is gone now."
He added that a recently signed strategic alliance with Nisa-Today's would be a key factor in driving future growth. He said the deal "has given us access to more than 6bn of buyer power and helped our retailers compete with the larger multiples".
No comments yet