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Spain-based Mercadona is expanding its meal solutions range in Spain, whilst having acquiring land in Portugal.

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Mercadona has launched a pilot in Valencia to test, learn and improve its online shopping service for its clients, the ‘boss’.

What’s new?

Opened on 21 May 2018, the new version of the online shopping system coexists with the current one, which is still available nationwide. The test version covers Valencia’s city centre and will be expanded to the wider city and nearby towns in months to come. Other cities will be serviced in years to come, with no specific dates given.

A new website and mobile app (iOS and Android) are part of the new model. Mercadona says that these services are more intuitive and easier to navigate, informed by Mercadona’s co-innovation centres. A notable addition is pictures of each product, with relevant product details. The assortment is similar to the physical stores.

Mercadona envisions its service for weekly shops, which has a minimum spend of €50. For now, payment is only via card. Deliveries can be made from the day after order placement, Monday to Saturday 07.00 to 22.00, in one-hour intervals. The order fee of €7.21 remains unchanged from the current system.

Source: Mercadona

Online distribution centre

€12m has been invested in the distribution centre in Valencia. The centre will be used exclusively for online sales. The centre named ‘Colmena' or ‘Hive’ spans 13,000 sq m. Mercadona says that productivity and efficiency are four times that of the current in-store preparation system.

Mercadona has partnered with Valencian transport specialist Subiela. Its vehicles have three temperature zones, with a mechanical unloading system. One of the vehicles supports 15 orders per trip, and the other nine for harder to access areas.

Source: Mercadona
“Mercadona is new to the digital world and we have much to learn. However, we believe that with humility and effort, and thanks to Mercadona's solid structure, we are in a good position to tackle the challenge of selling food online” Juana Roig, general director of Mercadona’s online project.

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Mercadona has had another strong year of sales growth as it increased its turnover by 6% to €22,915m, whilst achieving 5% volume growth.

Record investment

2017 saw Mercadona make a record investment of €1bn, 47% more than in 2016. This investment facilitated 13 (net) supermarkets to be opened, making the network total 1,627. 126 stores were remodelled to the New Efficient Store Model, making the total 182. Mercadona has been rapidly carrying out this new store design programme, considering there were only two new design stores in 2016.

Net profit was down to €322m, 49% less than 2016, this shows the company’s focus on long-term planning.

In 2018, the plan is to invest €1.5bn, to open 27 supermarkets and update 200 more stores to the New Efficient Store Model. In the long-term, 2018 to 2023, an investment of €8.5bn has already been planned and approved by the retailer.

Co-Innovation centres

Mercadona uses its 16 centres to understand its customers’ product needs and make product innovations tailored to them – ‘El Jefe’ (‘The Boss’). In 2017, 240 new products were formulated, and 105 reformulated, with an 82% success rate.

Two new co-innovation centres were opened in 2017. Located in Valéncia and in Matosinhos, Porto. The latter is the first centre in Portugal. Its current focus is to understand Portuguese consumers, and to adapt its Spanish products to Portuguese shoppers. Mercadona’s expansion into Portugal is still in the development phase. A distribution centre in Porto is being constructed, and is set to open in 2019, along with four stores. The new distribution centre is located as to link up with the existing supply chain in the north of Spain.

Mercadona to embrace new technologies

The Online Mercadona Project is set to launch in Valencia, in H2 2018. A website and mobile app will be built to support this. €12m was invested in this 13,000 m2 facility, which will support Mercadona’s online venture.

A note from the Mercadona’s president, Juan Roig

Roig, said that 2017 has been a turning point for all those who form Mercadona:

“We are working in the long term and committed to the consolidation of a disruptive transformation project that puts the effort of the people at the centre. Achieving this requires conviction and the great merit is the effort of the 84,000 people of Mercadona and the specialist suppliers who guarantee the everyday satisfaction of "El Jefe", our customers. They are the reason for these excellent results.”

Source: Mercadona

 

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Spain-based Mercadona has begun hiring staff ahead of its launch in Portugal, which is planned for 2019.

Hiring adds another location for Mercadona

Hiring has begun in Maia, which adds to three other locations in which Mercadona is already known to be planning to open stores; Gondomar, Matosinhos and Vila Nova da Gaia. The stores that are in development are set to have a sales area of about 1,800 sq. m and are, therefore, inline with those it operates in Spain. To support its expansion in Portugal Mercadona is establishing a distribution centre in the Laúndos Industrial Park, in the municipality of Póvoa de Varzim (in Greater Porto). The 17,000 sq. m site is planned to open by the end of January 2019.

New stores to follow new design

The stores set to open in Portugal are all set to be under its ‘Efficient store model’, which improves on shoppers’ in-store experience, by investing in their look and feel, while simultaneously reducing their environmental impact.

For subscribers wanting to see our impressions of Mercadona’s Efficient store model, see our store visit report.

Presentations

17/10/2018

An essential summary of trading priorities, latest developments, and other key commercial insights for Mercadona.

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We review Mercadona's outlook for the next five years, including its strategic initiatives and future growth opportunities.
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We visited Madrid to discover latest retailer initiatives, explore new and innovative concepts. See our pick of the best stores that show how retailers in the city – from national chains to local champions – are evolving their stores to meet shoppers’ desire to buy little and often.
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We review Mercadona's outlook for the next five years, including its strategic initiatives and future growth opportunities. 

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