Mercadona: innovation and expansion

Date : 17 August 2020

Lucy Bellotti

Retail Analyst

Mercadona announced it intends to continue its expansion plans, after slowing the pace of new store openings due to the coronavirus pandemic. Meanwhile, the retailer reveals new projects in Spain and Portugal to reinforce local buying and its expansion plans, with it giving specific details about its plans for the latter country and how it will invest in Madrid.

Store openings in Portugal

Mercadona entered Portugal in 2019 and ended the year with 10 stores, generating a revenue of €32m in its first six months of operation.

Mercadona launched a new store in June 2020, in Aveiro. The retailer claims it is ‘fully prepared to resume its expansion plan and ensure the opening of the 10 stores planned for 2020’. The new store covers 1,800 sq. m and is its third in Aveiro.

The new supermarket has implemented full safety features to comply with government guidelines to protect staff and shoppers. The company claims the new store provides an assortment of high-quality products at competitive prices.

New commitments in Spain and Portugal

Mercadona plans to reinforce its commitment to Spain and Portugal by investing in local products and regional expansions including:  

  • Purchasing 21,300 tonnes of cucumbers of national origin in 2020
  • Maintaining its support of 9,500 farmers, 12,000 fishermen and 6,700 ranchers
  • Continue its expansion in Portugal, which was temporarily paused due to the coronavirus pandemic

Future developments in Portugal

The retailer plans to open 20 new stores per year in Portugal. Since the beginning of the coronavirus pandemic the retailer has added two stores, with an average sales area of 1,900 sq. m. Both featured its new efficient store model.

Mercadona plans to launch its first store in Lisbon by 2023 and aims to reach 150 stores across the country in the long term. Elena Aldana, Mercadona’s international director for external relations, stated the set-up in Lisbon is complicated and would require new infrastructure, including a new logistics platform and bigger offices.

The company plans to continue its sustainable-focused initiatives, it has invested €44m to protect the environment. The commitment has saved 16 tonnes of virgin plastic annually. Furthermore, Mercadona has joined the Portuguese Pact for Plastic and the Smart Waste Portugal Association. Its three main areas of focus for sustainability are plastic reduction, waste management and energy efficiency.

Mercadona accelerates investment in Madrid

The retailer has reinforced its investment in Madrid, to help support economic activity in the region and help to offset the social and economic consequences of the coronavirus pandemic.  Furthermore, Mercadona plans to open seven new stores and to update 27 more to its efficient store model. It is implementing its ready to eat concept in 45 new stores.

Mercadona has also announced it will invest in its Frescos Global scheme, a project which will improve its fresh sections.  

José Antonio Jiménez, Mercadona’s director of Institutional Relations stated, ‘Reactivating the economy of the areas in which Mercadona is present in the Community of Madrid, through actions, as reflected in the announced investment plan, is our responsibility as a company and a decisive test for the economic and social development of this community’.

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