Not even the pandemic has managed to weigh down Mercadona’s unstoppable rise, although its presence in the market has minimally. The supermarket chain led by Juan Roig has once again set a new record in the most difficult year in history, at least the recent one. While the economy was collapsing to levels not seen since the Civil War, its turnover was once again skyrocketing to reach 27,000 million. Specifically, it registered sales of 26,932 million in 2020, which represents a growth of 5.5%, an increase half a point higher even than in 2019.
But even greater was the tax on its net profit, which rose to 727 million, representing an increase of 17%, compared to 5% a year ago. In other words, in the midst of the pandemic, the leading distribution chain in Spain managed to add 100 million more after multiplying its profit growth by more than three. And that despite the fact that it dedicated 1,500 million to invest in new store openings and reforms, in creating new logistics blocks and in digitization. “We have managed the company very well,” Roig said with pride.
And not only that. In addition, while the Spanish labor market is experiencing one of the most complicated moments after losing nearly a million jobs in just over a month and a half and having more than 3.6 million workers in ERTE, the Valencian company has achieved a milestone in creating 5,000 new jobs. To date, it has a workforce of 95,000 workers (93,300 in Spain and 1,700 in Portugal), placing it at the head of the Spanish companies with the largest number of employees.
There is only one cross in the results that Juan Roig presented today at a press conference from his co-innovation center in Valencia. Mercadona has lost half a point of market share this year and has fallen to 26.4%. There are two main reasons, both external, for this decline: the first that the president listed is that the lack of tourists has affected them “a lot”, since the company is very strong in eminently tourist areas, such as the Mediterranean area. Canary Islands or Balearic Islands, and it has less force in Madrid, the Basque Country or Galicia, with less weight in this sector.
But Roig also recognized that another cause of this decline in the market is competition. “It has hurt us that there are some of our competitors who are doing better than us,” admitted the Valencian, which – he pointed out – is leading them to “get on their feet.”
“War” for quality
For this reason, he reiterated on numerous occasions the main challenge that Mercadona faces: improving quality, both in Spain and Portugal, especially in fresh products such as fruit, vegetables or fish. “In the next few years the customer will perceive it,” said the president, who ruled out that prices are going to drop, as other chains are doing. “Mercadona is not going to enter the price war, but the quality war,” he bet.
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