Mercadona, the largest supermarket chain in Spain, once again raised its sales last year with strength and boosted its profits. The company that presides over Juan Roig has presented its results of 2018. This time there is no blip: its benefits are up to 593 million euros, 84% more compared to 2017. It compensates the drop of 49% that had registered in 2017 due to the strong increase in investment, as the company then justified. Sales rose 5.8% to 22,235 million euros net (24,300 million gross sales), a growth very similar to the previous year.
The company, in addition, has created 1,800 permanent jobs in a year, until having a workforce of 85,800 workers. Most are in Spain, but a small part (about 300 people) are already located in Portugal, where the company is about to start operating. It plans to open 10 supermarkets there in 2019, the first in July. If they do well, they will continue with the plan, with the goal of having in the period of seven to eight years about 150 stores in Portugal.
All the first supermarkets in Portugal will be close to Porto. From there, they foresee an expansion towards the south. "I wanted to show that Porto is as good as Lisbon, just like Spain is more than Madrid," said Roig. "To demonstrate that I am not a centralist and that not all AVE have to leave Madrid," he justified as an entrepreneur, very active in Spain in the defense of the Mediterranean Corridor, the freight train line along the coast. In Portugal, as Roig advanced, they will open on Sundays, because there "there is custom". In Spain, added the president of the group, they do not have it planned. "That would raise costs and we would have to raise prices and we do not want that," he said.
1,504 million investment in one year
Total investment of Mercadona in 2018 was 1,504 million euros, in line with its forecasts. Of this figure, 962 million have been spent on openings, supermarket reforms and changes. To that 257 are added in the logistics blocks, another 225 million in the digital strategy and 60 million in the opening in Portugal. Its 2019-2025 plan includes a new investment plan of 10,000 million in total. "Without getting into debt, because we trust in the management of the company," said the group's president.
Juan Roig has not missed his appointment with the media, in the only appearance with questions he offers each year to talk about his supermarket chain. This time, yes, the scenario was different: it was usually held at a company headquarters in Puçol, near Valencia. However, that property, where in addition to the hall for events there was a bread and cake factory, it burned in June of last year (without causing personal injury). So the company has taken this time to locate their annual meeting in the co-innovation center they have in Valencia. It is a kind of supermarket 'lying' where employees do practices and the company performs tests and experiments of commercial image and product.
There they wanted to make the official presentation of one of the latest bets of the company: the food prepared to take away, which since last summer they sell in some of their establishments. They want to extend it to 250 of their supermarkets.
Deployment of 'hives' for Internet commerce
Mercadona has presented the first results of its new sales strategy on-line. It is based on having a new website and opening special stores, which call hives, intended only to serve and deliver orders over the Internet. Now they have one in Valencia, which has been running since last May. It has served as spearhead and, according to Juan Roig, works great. Therefore, as it progressed this Tuesday, they are going to open another hive in Barcelona, in the Free Zone, with capacity to make 30,000 deliveries per month and 300 people on staff. Afterwards, an accelerated expansion will begin: first in Madrid, where it hopes to open two beehives. A second center will also arrive on-line for Barcelona. And afterwards (still without a fixed date) they want to open also these special warehouses in A Coruña, Bilbao, Zaragoza, Palma, Alicante, Murcia, Seville, Malaga and Las Palmas.
Roig also stressed that another of the company's objectives in the coming years is to invest in reforming its current supermarkets to the new model they have developed, with more extensive and many new sections of fresh or processed foods in the store. Currently with this new format have 400 locations, and according to their forecasts, they will reform another 400 more this year and another 20 in 2020, to reach 1,000 locations. The goal in 2023 is to have 1,600 supermarkets with this model. In the same period, says the president of Mercadona, in addition to the reforms will open 60 new stores and close another 100 that now exist, as explained by the businessman, because some stores can not be reformed, others closed because they do not meet some basic characteristics they need now and will be replaced, and others will close "because we do not take money from them," he summarized.
Asked if Mercadona, which already has stores in all the provinces of Spain, has peaked, Roig admitted that "1,600 stores is a good figure." They are going to reform many supermarkets. "And we will open some but we will also close others," he explained. But in Spain, the great expansion seems to have come to an end, and now they focus on transformation. The inaugurations, now, will be concentrated in the logistics centers in Spain (especially hives for sale on-line) and new stores in Portugal.