Spanish retailer Mercadona has announced an increase in turnover for 2016 of 3.9%, reaching €21.6 billion.
Net profit reached €636 million, an increase of 4%,while the volume of sales grew 4%. Investment in capital expenditure hit €685 million, part of which was used to open 50 new supermarkets and refurbish 35 others.
The company credited its results to its 'Surtido Eficaz' strategy (Effective Assortment) which relied on innovation, the drive towards fresh products, and collaboration with providers, to satisfy and 'surprise' customers.
The strategy encouraged the creation of 300 new items and the improvement of 350 products, such as freshly-squeezed orange juice, sushi, and super foods such as chia seeds, black garlic, and quinoa.
During the year it created 4,000 new permanent positions, for a total workforce of 79,000.
It called the implementation of its new 'efficient' store model and its entry into Portugal the two largest milestones of the year. It also continued to build its logistics hubs in Barcelona and Vitoria-Gasteiz, as well as its data-processing centre in León.
Mercadona of the Future
Mercadona also announced that it will make its largest investment ever this year, of between €1 and €1.2 billion - which will include some compromises.
"In 2017, the company will sacrifice up to €200 million in net profit ... with the objective of cementing the foundations of the Mercadona of the future", commented Mercadona president Juan Roig.
"The company has decided to cut its profits in the short term so that its projects can advance more quickly and undergo sustained growth", he added.
Other initiatives this year include augmenting its staff in the purchasing recommendation department to improve its selection for customers.
The retailer will also advance its expansion in Portugal, where it has acquired land for one of the four stores it will open there in 2019.
Finally, Mercadona said it will quadruple the investment sunk into the maintenance and refurbishment of its stores, for a total of 126 outlets. It will also open 30 new format supermarkets, with a larger, more comfortable sales space, as well as an improved display and assortment of goods.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Karen Henderson. Click subscribe to sign up to ESM: The European Supermarket Magazine.