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

Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from Spain.

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.

As Eroski continues to expand its range of online fulfilment options for shoppers, Carrefour trials a new store design in Madrid and Grupo IFA forecasts continued revenue growth in 2017 for its members, we round up news from Spain.

Eroski adds delivery service

Eroski has launched a delivery service that enables shoppers to receive orders made before 15:00 to receive their products on the same day. The service, available only from Monday to Friday, is free for shoppers. Customers can choose from a range of 15,000 SKUs and has proved popular, with the retailer’s online business manager, Mari Mar Escrig, quoted as saying: “In its first days in operation, more than 20% of customers have opted to request delivery on the same day.” The new fulfilment option means that shoppers can order online and have them delivered or collected in-store or at collection points in stores’ parking areas.

Carrefour opens gourmet store in Madrid

Carrefour has added a premium Market store in Madrid. The new supermarket uses more colour, has upweighted its fresh offer and expanded its range. Spread across two floors the store dedicates the whole of the ground floor – which measures 490 sq. m – to fresh produce: fruit, meat, fish, cheese, bakery and sushi. The basement floor – which measures 580 sq. m – provides shoppers with perfume, drugstore, wine and frozen products. In total the store carries 12,000 SKUs. To enhance the offer, the store also provides services like dry cleaning, shoe repairs, free wifi, photo development and home delivery.

Grupo IFA forecasting revenue will grow 5% in 2017

As part of a presentation at the Aecoc Congress, Grupo IFA’s chief executive, Juan Manuel Morales, said that it was expecting its members to increase their sales by between 4% and 5% in 2017. Morales said that IFA was ‘happy for the evolution that is having the year, so we have the confidence that it will be a great exercise, in line with the last two years’. He went on to note that its members’ strategy was based on three pillars: proximity, fresh products and choice. With the latter point, IFA’s members are overweight with branded ranges, with manufacturer brands accounting for 81% of their ranges, versus 64% in Spain more widely.

Mercadona expands ‘Hippos’ childcare range

Mercadona has added new products to its Hippos child-focused private label range. The new items are focused on children’s hygiene and are manufactured by the retailer’s long-standing partner, the Suavinex Group. The launch sees Mercadona add shampoo, moisturising lotion and body oil, amongst others.

Ulabox launches Black Friday campaign

Sonae-owned Ulabox has said it will operate a Black Friday campaign from 23 to 28 November, offering savings of up to 50% on grocery ranges. The 50% off fresh food ranges will only available to shoppers in Barcelona and Madrid, while wine and other products will be available across the whole country.

For subscribers wanting more insight on Spain, see our country presentation.

Want to keep up-to-date with developments in Spain? Sign up to our free newsletter here.