Ask any Spanish consumer to name a leading supermarket chain in their country and it is very likely that the name of Mercadona will feature highly. The soft discounter, which positions itself somewhere between Carrefour and Lidl-style hard discounters, has retained its position over recent years as Spain’s top grocery retailer in spite of strong competition and an economic recession that has hit the nation especially hard.
In fact, although its rate of growth may have slowed from a peak of 100 new outlets per year between 1999 and 2003, Mercadona is still on course to increase its sales to €20bn by 2014 and continues to expand at a rate of around 40-45 new stores each year. During the course of last year, Mercadona achieved an estimated turnover of €16.5m, according to Planet Retail, up 6.3 per cent compared with the previous year.
According to a spokesperson for the company’s fresh produce department, Mercadona’s effectiveness in not only surviving but thriving during the recession has primarily been the result of taking decisions to strengthen productivity, rationalise the business and innovate within its product range to adapt to the needs of consumers and suppliers alike. “Mercadona has achieved a saving of €2,200m for its clients thanks to a focus on optimising costs and processes to lower prices, while maintaining the food safety and quality of the products,” said the spokesperson.
As part of this economy drive, the retailer has established long-term contracts with suppliers that have seen them in turn develop a series of initiatives with their grower base, the first being an agreement with Verdifresh to dedicate over 300ha to producing spinach, rocket, chard, parsley and radicchio exclusively for Mercadona. Equally important for the grocery sector, says the spokesperson, has been Mercadona’s focus on traceability. Some 85 per cent of the fruit and vegetables sold by the chain are produced within Spain, with other sources covering non-seasonal gaps in supply.
The retailer sees innovation as key to growth and has invested in fresh-cut ranges, recently launching a peeled pineapple and a five-vegetable microwave mix.
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