El Corte Inglés has launched an anti-inflation plan designed to address some of the impact it is causing at the economic and business levels. In its financial report published this Tuesday, the company points out that the “heavy sanctions against Russia” have exacerbated the inflationary situation, which is due to the rise in energy prices, the “disruptions” in the supply of raw materials and food, and tensions in the consumption chains or transport problems.
In light of this, and to “mitigate the impact” of inflation, the sales group says it is implementing “cost-cutting improvements.” Here he refers to the “digitization of processes” and the “personnel restructuring plan”.
In this final section, we need to remember the exit plan that saw nearly 3,300 of the company’s employees leave the company a year ago. To this we must add the 475 of the ERE that Viajes El Corte Inglés agreed with the unions in March this year. At the same time, the group is sticking to its partial retirement plan, which affects employees over the age of 61 and for which it had set aside 53.2 million euros as of February 28 of this year, the same date as in the previous year. Included in this “restructuring plan” that El Corte Inglés is examining are workers from shops who have closed their doors and are moving to others or being transferred to another job. Each new ERE is discarded by society.
energy and logistics
Work. On February 28 of this year, El Corte Inglés had a total of 79,804 employees, 1,010 fewer than at the same time in 2021. The company has thus fallen below the 80,000 employee mark for the first time in almost 20 years. The number of full-time employees fell to 71,404 on average over the year. This is the lowest since 2000, when the company reported 68,759 on its books. In 2021, the company committed to the voluntary departure of 3,292 workers and took over 412 from Sánchez Romero. Since 2010, when it surpassed 100,000 employees, El Corte Inglés has reduced its overall workforce by 22%.
In the face of inflationary pressures, this includes the activity of its logistics subsidiary El Corte Inglés Advanced Logistics, with which it intends to grow in this business by providing services of this type to third-party companies. The company says its creation aims to “improve the distribution chain in situations of point bottlenecks and disruptions in the supply and distribution transportation network.” In other words, a way to avoid dependency on third parties in particularly stressful situations like the traffic strike last March.
Finally, El Corte Inglés is also trying to stop the rise in energy prices. As explained in the report, “in the face of the increase in energy costs, it takes timely action and implements plans to cover future purchases, making it possible to reduce costs and guarantee future flows”. In other words, it’s exploring new long-term supply agreements (PPAs, in energy jargon) through its subsidiary Telecor, under which it’s grouped its entire energy business, such as new marketer Sweno Energy.
Despite the economic context, the group’s president, Marta Álvarez, explains in the non-financial report that El Corte Inglés “is in a promising situation for the future”, despite “the persistent impact of the health crisis, the low recovery tourism and the complex economic environment , in which we live, with rising inflation, an unusual escalation in energy prices and a restraint in consumption resulting from the rise in prices”.
Álvarez adds: “Taking care of the product and customer service, continuously improving our stores and developing new ones […] They are the axes that allow us to grow as a company.”