LETTER FROM AGUSTÍN MARKAIDE

Chair

We present this annual report to society and our stakeholders as part of a regular and fundamental exercise in transparency. For the third year in a row, we are publishing this report in accordance with the new Global Reporting Initiative (GRI) standards to continue to improve the communication of our impacts and improvement actions in three areas where we measure our level of sustainability: the economic, social and environmental areas.

With the 2018 financial year, we’re at the midpoint of our current strategic plan based on differentiation, with health and sustainability as the main pillars. The good results of the “with you” business model has strengthened our leadership in the North, where we have concentrated the transformation of our network thus far. This has included the opening of stores under our own-brand and franchises that bolster our position. Consequently, our operating results have continued to improve significantly and confirm good business health and firm stability over recent years. Our roadmap is supported by the benefits arising from recent transformations in our value chain, from logistics processes and our relationship with suppliers to our stores and relationship with Client Partners via EROSKI Club. We must continue developing this roadmap to become a better business, capable of responding to the needs of constantly evolving consumers. Therefore, we are now focused on accelerating renovations in our remaining markets, and we’re making significant progress in the Balearic Islands, as well as Catalonia, to boost our competitiveness in these regions.

We have taken an important step with our best customers by launching the Gold Programme, which offers stable discounts on all their purchases and which has yielded noteworthy results. This initiative was developed by the Client Partners Club and has allowed us more opportunities to meet them and offer a more intense, participatory and personalized relationship that we will continue to strengthen.

We continue to make progress in our digital transformation and in 2018, for the second year in a row, we were recognized as the best online supermarket, which confirms the excellent evaluation we receive from our customers. Likewise, we closed the year as leaders of the online order delivery service, with 50 pick-up locations, by car or at the store.

At EROSKI, we believe that the store, be it physical or online, is the ideal place to promote a good, healthier and more environmentally friendly diet. That’s why in 2018 we published 10 new commitments to health and sustainability that set the path for us. We have launched more than 20 lines of work to meet these commitments. Implementing advanced Nutri-Score nutritional labelling on our ownbrand products – which makes us pioneers in Spain – is a clear example. Moreover, we relaunched our EROSKI Natur brand, which includes produce with a differential flavour from a guaranteed responsible source. Certification in animal welfare and chain of custody of sustainable fish, using antibiotics responsibly and eliminating post-harvest treatments are just some of the criteria the foods sold under this brand meet.

We are also committed to the consumption of local foods, promoting an agri-food sector that bases its sustainability on the fact that its productive fabric is a key element for the local economy and culture, and the environment. It is our nature as a cooperative that lead us to commit to this diversity and to creating collaborative environments to work with a large number of suppliers. In this way, our business offer is more and more specialized and focuses on making a healthier and more sustainable diet possible.
Our commitment to the environment also translates into continuous improvement of our processes and stores. Containers and packaging with an ecodesign to prevent plastic pollution, the efficient management of logistics and the building and renovation of stores according to environmental criteria and using eco-efficient equipment clearly demonstrate that this line of work also represents one of our strategic development pillars.

In line with environmental sustainability and our social commitment, we have maintained the objective of Zero Waste of food suitable for human consumption in our business network. In 2018, we donated 4,928 tons of products to those who need it most through more than 100 social organizations throughout the country, under guaranteed conditions of food security, gratuity and solidarity.

We also collaborated with the country’s main charity causes and organizations and dozens of entities of various types working for different social causes. Many of these actions are channelled through the EROSKI Foundation, which manages the 10% of our annual profits that we dedicate to social and charity projects.

Another of the Foundation’s main axes of work also deserves special mention: consumer information and education. We have been involved in consumer education for 40 years through our news project EROSKI CONSUMER, a consumer magazine published in Spanish which receives approximately 50 million visits online per year. In addition to this project, we must mention the EROSKI Foundation Nutrition School, with its Healthy Eating and Habits Education Programme aimed at schools and which has educated more than 1 million boys and girls since 2013. It is aimed at helping the citizens of tomorrow improve their nutrition habits and, like the aforementioned actions, is part of our commitment to health and sustainability.

Those of us who make up EROSKI are working together to strengthen our cooperative project and ensure our place in the future. This internal collective strength that has granted us almost 50 years of business is undoubtedly essential to our future and ability to respond to what society expects from us and deserves. We are moving forward in the right direction.

I encourage you to read this annual report to learn more about our performance in 2018 and the actions we have taken as a result of the commitment to sustainable development we endorsed in 2002 by signing the Global Compact and which we renew every year. This is how we are working to meet the 17 UN Sustainable Development Goals that came into force on January 1, 2016. We hope you find it interesting and inspiring.

Thank you.

Agustín Markaide.
Chair of EROSKI Group