Mercadona, the largest supermarket chain in Spain, closed last year with a net profit of 1,009 million euros, 40% more. Gross sales (including VAT) grew by 15%, up to 35.5 billion, according to the results presented this Tuesday in Valencia by the president and main shareholder of the company, Juan Roig. “It has been the best year,” said the businessman. The year was driven by improved productivity, the good momentum of tourism and the growth of business in Portugal, which was profitable for the first time last year.
The company, first in market share in Spain with 27.6%, considers that the improvement in results is essentially the result of the investments made since 2016, which amount to 10,000 million, to transform the stores and their logistics blocks and make them more efficient. Thus, 1,364 of its supermarkets have been renovated and renovated in recent years. In total, Mercadona has 1,681 stores, 49 of them in Portugal. “We have changed the location of 400 stores and we have closed 130,” Roig stated. According to the businessman, the closure or transfer of establishments is one of the “brave, and sometimes unpopular and annoying, decisions” that he has had to make to increase efficiency.
The best results in the history of Mercadona occurred in a year marked by increases in food prices, but Roig has assured that the company, which raised prices on average by 10% in 2022, has carried out price reductions of a thousand products between April 2023 and February 2024. These reductions have contributed, according to the owner of Mercadona, to the company gaining six tenths of market share last year. In this sense, the gross margin remained practically the same: it went from 25.4% in 2022 to 24.5% in 2023, nine tenths less.
“Having profits is now very maligned, but having profits is a very good thing,” said Roig, who also pointed out that you always have to have suppliers and employees to move companies forward. “We are the ones who generate wealth and the well-being of society depends on the number of honest businessmen it has,” he added. Among other measures to gain efficiency, the president of Mercadona has given as an example the organization in the purchasing department, which now has two managers instead of seven. In addition, they have doubled the office workforce by up to 6,800 people, to improve productivity, digitalization and purchasing.
Regarding the impact of the VAT reduction on some products, which the Ministry of Economy is investigating, Roig said that all reductions have been passed on to the consumer: “When VAT goes down, we lower prices and vice versa, we have never done so.” used as a commercial tool. More people went to supermarkets last year: 200 more tickets were registered per day, up to 2,400.
The market share in Portugal, where it became profitable for the first time in 2023, reaches 8%. The investment since 2016 amounts to 900 million. “Last year was the first without losses,” he highlighted. Sales reached 1,403 million last year and the forecast is to open 11 more stores in 2024 and bill 1,900 million.
The Valencian chain established itself last year as the first employer after surpassing the barrier of 100,000 workers (98,700 in Spain and 5,300 in Portugal), above El Corte Inglés (81,000) and Correos (78,000). Since 2016, Mercadona has created 25,000 new jobs. Last December, the company signed a new collective agreement, in force from 2024 to 2028) with union representatives, by which it was agreed to link up to 2.5% of the annual base salary increase to the CPI, and up to 6% depending on the fulfillment of objectives.
Mercadona is the food chain that, together with the German Lidl, has emerged in a better position from the food price crisis that started in mid-2021. These two companies have been the ones that have gained the most market share, until 26.2% Mercadona and 6.4% its rival, according to data from the consulting firm Kantar at the end of 2023. In general, all supermarkets have expanded their dominance in the market, at the expense of traditional commerce: the joint share of The chains closed 2023 at 74.9%, 1.3 points more than the previous year and 12.8 points more than a decade ago.
Mercadona currently has three shareholders: Juan Roig owns 50.66%, his wife Hortensia Herrero holds 27.71% while Fernando Roig controls 9%. In addition, there are 6.3% of the company's shares that are held in treasury stock.
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