Mercadona is overhauling its private label sourcing strategy in order to bring more agility to its business model.
The supermarket group is abandoning its exclusive contracting model, based on 120 “super-providers” supplying complete product categories, supplemented by around 1,400 specialist providers for specific products.
Instead, it will move towards a model of so-called ‘totaler providers’ contracted on a product-by-product basis.
It means that several companies will be able to make private label products for Mercadona within the same category.
Sources at the retailer said that with the introduction of the ‘totaler provider’ Mercadona was seeking to offer the customer a wider range of products at the most competitive price.
The company acknowledges that one of its great mistakes was to believe that a single supplier could provide a complete category.
Mercadona’s old model also left suppliers with little room to develop their own business initiatives outside their relationship.
