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Supermarket giant Mercadona has increased sales by 15% and posted a record profit of more than 1 billion euros
Retail

Supermarket giant Mercadona has increased sales by 15% and posted a record profit of more than 1 billion euros

President Juan Roig, announcing the results, said he was "very proud of the 104,000 Spanish and Portuguese staff" and went on to predict lower prices for customers in 2024 and a "spectacular" future for the company

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Malaga

Tuesday, 12 March 2024, 16:40

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Mercadona, the supermarket chain giant in Spain, has increased its net profits by 40 per cent, reaching 1,009 million euros (just over 1 billion) euros in 2023, after registering a 15% increase in its sales, which have amounted to more than 35 billion euros.

This was stated by the president of Mercadona, Juan Roig, during the company's annual press conference in which he revealed Mercadona's economic data for the year 2023 and the forecasts for 2024.

Roig described the results as "spectacular" and he assured that it is "a source of pride" for him to head this company, adding: "I am very proud of the 104,000 Spanish and Portuguese workers who make up Mercadona."

"In 2023 Mercadona did very very well. It was the best year ever for all the parts of the business and we are very proud of these results.” That was how Roig opened the traditional press conference that he holds every year in Paterna (Valencia) to present the financial results of his company. It is generally the only time he appears in public before the media and, on this occasion, with a very special onlooker: his wife, Hortensia Herrero, who had never previously accompanied her husband at this event - despite being her vice president.

And where are those more than 1,000 million euros of net profit going? The founder of the leading supermarket chain in Spain explained that 800 million euros have already been reinvested in the company itself, to continue modernising it and making it more efficient, while the remaining 200 million euros have been distributed among the shareholders.

“Unpopular” decisions

For Roig, Mercadona's success lies in three elements: having a great distribution model, making the right decisions and knowing where the company is going. "We are successful because we have a great business model, because we make many brave and sometimes unpopular and annoying decisions. We are very clear that we know where we are going," explained the Valencian businessman, who said that he sees "a spectacular future" ahead for his supermarket chain.

Among those "unpopular" and difficult decisions, Roig cited the relocation of 400 supermarkets and the closure of 130 stores, some for being too small, others for having poor accessibility or for being unprofitable. In fact, Mercadona currently has eight fewer stores than a year ago: there are now 1,668 after closing another 13 in recent months.

The president of Mercadona explained that throughout 2023 its stores have been improving the assortment of their products and they have also improved the quality of 500 products and have lowered the price of 1,000 items. "We have managed to lower the price of the shopping cart more than inflation," highlighted Roig, who, however, acknowledged that some staples including pasta, olive oil and rice have increased in price.

However, Juan Roig predicted a new drop in prices, since the prices of some raw materials are falling. "It is always more difficult to lower prices than to raise them, but there has been a drop in the costs of raw materials," he said.

For this year, Mercadona's objective is, once again, to beat its own record again, with a projection of 37.8 billion euros, having a net profit similar to 2023 and, therefore, greater than 1 billion euros again. Likewise, it plans to continue creating jobs and increase the workforce by 1,000 workers, as well as predicting that this year they will obtain further benefits from their opening of stores in Portugal.

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