El Corte Inglés has carried out the largest reorganization process in its history in the supply chain. With the aim of improving the efficiency of the group’s purchases, the Spanish retail giant has completed a consolidation that has reduced the number of suppliers practically in half, from 58,117 on February 28, 2020 to 31,488 with which has remained at the end of the last fiscal year this year, just when the path of recovery has started .
Although the company assures that the drop in the number of suppliers is also influenced by the impact of the Covid-19 pandemic, which has caused the cessation of an important part of the commercial activity, especially in Viajes El Corte Inglés, it also admits that a significant part is due to the ” supplier consolidation process that the group started three years ago”. Between 2018 and 2019 the number remained practically stable and it is now that, partly due to the pandemic, the consolidation has accelerated .
With a volume of purchases in the last fiscal year of 8,377.9 million euros, 23.5% less precisely due to the drop in activity due to the closure of stores and restraints, El Corte Inglés maintains a firm commitment to Spain , where it concentrates 77% of suppliers and 84.8% of its total volume of purchases . They are a total of 7,104.2 million euros, compared to 677 million in purchases of merchandise in other States of the European Union and 596.47 million in non-EU countries.
This commitment to local suppliers has also been consolidated with the MÑ Made in Spain program in the field of fashion and accessories for own-brand garments such as Emidio Tucci, Én Emphasis Black or Gloria Ortiz. As explained by El Corte Inglés, “this project, which combines the attributes of sustainability of local and responsible production, adds value to our own brands”.
“The supply chain is the starting point to satisfy customer needs. For this reason, we make a careful choice of our suppliers so that they comply with the best practices of responsible production that result in our commitment to quality.
We maintain a relationship of trust and collaboration with our supply chain, which allows us to promote the development of local economies wherever we are present, “says the group.
In addition to the Madrid headquarters, El Corte Inglés, which has followed the principles of the ILO (International Labor Organization) Call to Action with 2,647 audits to the factories that supply merchandise in the last year, has purchasing offices in Lisbon (Portugal), New York (United States), Tangier (Morocco), Istanbul (Turkey), Hong Kong and Shanghai (China), Dhaka (Bangladesh), Karachi (Pakistan), Ho Chi Mihn (Vietnam) and New Delhi ( India).
In its latest annual report, the company chaired by Marta Álvarez highlights that “in the retail field, most of the private label suppliers are located in third countries” and that “in this sense, the pandemic has revealed the Great effort made by the group to maintain commercial relations with our suppliers in these countries, assuming previously placed orders, despite the cessation of an important part of our activity due to the established measures.
El Corte Inglés assumes the supervision of good practices in Environmental, Social and Good Governance (ESG) aspects, as well as respect for Human Rights throughout the supply chain, through different tools such as risk analysis, audits or training, among others.
Thus, suppliers must pass the group’s approval process, which begins with an examination of their performance in terms of legal compliance and is extended to an analysis of financial solvency.
“In addition, they must assume and accept as their own the Principles of Action of the Group through their adherence to the Letter of Commitment of El Corte Inglés, which links them to our Code of Ethics,” they explain from the company.
After the difficulties of last year as a result of the pandemic, El Corte Inglés has registered in its first fiscal quarter -between March and May of this year- a positive EBITDA of 81 million euros, 276 million euros more than in the same period of 2020, thanks to the increase in sales of 50.2%, reaching 2,511 million euros, despite the maintenance of restrictions and the lack of tourism from abroad.