Despite the challenging and unpredictable economic circumstances, the modern food retail market in Portugal remains fiercely competitive, with significant promotional activity and a rapid pace of store expansion.
Over the past decade, the concentration of the market has significantly increased, with the two largest distribution groups (MC Sonae and Grupo Jerónimo Martins) accounting for approximately 50% of the market share, which rises to almost 75% if other major players Intermarché, Lidl, and Auchan are included.
Retailers such as Mercadona, Aldi, and Lidl, with ambitious expansion plans, are also exerting increasing pressure on established players in the supermarket sector.
The number of food retail stores continues to grow, with 257 new stores opening in 2021, primarily in the form of proximity and convenience stores. At the same time, Portugal is still one of the few European countries with an extensive network of independent local operators (Unimark), which continue to play a significant role, representing 10% to 20% of the industry.
State Of The Market
To combat increasing inflation, in April the Portuguese government cut VAT to zero on a range of essential items – including milk, bread, rice, tomatoes, and some meat and fish products – a move that appears to be working, with retailers not taking advantage of the measure to increase their profit margins, Prime Minister Antonio Costa said recently.
Consumer prices rose 5.7% year-on-year in April, compared to a 7.4% increase the previous month, data showed.
Amid rising prices, many shoppers have turned to discounters or private-label brands as they seek to save money, but as a recent study by consumer group Deco Proteste has found, the price of store brand products is actually rising at a faster rate than that of manufacturer-brand goods.
Here's an overview of the top ten supermarket retail chains in Portugal, according to their most recently-available full-year turnover. All data is supplied by Retail-Index (www.retail-index.com).
1. MC Sonae
Turnover: €5.978 billion (2022)
Since opening the first hypermarket in Portugal in 1985, MC Sonae has developed into the leader in the food retail sector, with a market share of around 26%.
The company achieved a 2022 turnover of €5.98 billion, according to Retail-Index, from a multi-format store network of 1,342 stores, of which 984 are company operated. Its main banners are Continente (urban hypermarkets), Continente Modelo (large supermarkets), Continente Bom Dia (proximity supermarkets) and Meu Super (neighbourhood franchise stores).
In 2021, Continente was the first European brand to open a store with no check-outs or product scanning (Continente Labs).
MC Sonae is also present in the health, wellness and beauty segments, and also runs coffee shops, stationery, pet and home décor stores. The CEO of parent company Sonae is Cláudia Azevedo.
2. Jerónimo Martins
Turnover: €5.657 billion (2022)
Jerónimo Martins operates in the food distribution and specialised retail sectors in Poland, Portugal and Colombia.
In its home market, the group operates banners including Pingo Doce (€4.05 billion in sales) and Recheio (€906 million), which are market leaders in the supermarket and cash & carry segments, respectively.
Pingo Doce holds around 21% share of the market. Jerónimo Martins' store network in Portugal consists of 464 Pingo Doce and 38 Recheio stores.
Private label products were responsible for 35% of sales at Pingo Doce (under brands such as Pingo Doce and Go Active) and 26% at Recheio (brands include Amanhecer and Masterchef). The chairman of Grupo Jerónimo Martins is Pedro Soares dos Santos.
3. Os Mosqueteiros
Turnover: €2.93 billion (2022)
Intermarché posted a 2022 turnover of €2.93 billion, and has a 11.1% market share in Portugal. The group operates 261 Intermarché stores across 18 districts, and, in recent years, the company has refocused its attention from hypermarkets to the proximity channel.
Its PorSi private label brand consists of over 3,300 SKUs, and accounts for 26% of the group's sales. The chairman of parent group Grupo Os Mosqueteiros is Pedro Subtil.
Turnover: €1.9 billion (2022, estimated)
German discounter Lidl entered the Portuguese market in 1995 and has since opened over 260 stores, achieving an 11.7% market share. The company does not publish financial results, but its 2022 turnover was estimated at €1.9 billion, according to Retail-Index.
In 2021, Lidl opened the chain's first store in a motorway service area in Europe, located in Oeiras (A5), in partnership with Brisa. It has also been opening proximity stores in train and metro stations in Lisbon. The retailer plans to invest €100 million to open its first stores in the autonomous region of Madeira during 2023.
Private label accounts for around 80% of Lidl Portugal's assortment and brands include Milbona, Três Velas, Fumadinho, Chef Select, Terra do Vento, and Cien. The CEO of Lidl Portugal is Alexander Frech.
5. Auchan Retail
Turnover: €1.155 billion (2021)
Present in Portugal since 1970, when it opened its first supermarket, French retailer Auchan operates 65 stores, of which 21 are franchised. It reported a turnover of €1.15 billion in 2021, according to Retail-Index.
Its network consists of three hypermarkets, four supermarkets and 30 My Auchan ultra-proximity stores, in addition to 29 petrol stations. Auchan Retail Portugal has a 5.9% market share and employs 8,479 people. The chief executive of Auchan Retail Portugal is Pedro Cid.
Turnover: €789 million (2022)
Since its arrival in Portugal in 2019, Spanish supermarket chain Mercadona has set a goal of opening 10 new stores per year, targeting around 150 to 200 outlets in total.
Mercadona reported €789 million in sales from its Portuguese operations in 2022, where the banner holds approximately 3% market share.
The banner ended the year with 29 stores in Portugal, nine more than in 2020. Each store offers around 6,000 SKUs, of which private label accounts for 50%.
Turnover: €583 million (2021)
DIA operates 499 stores in Portugal, of which 202 are company-owned and 297 franchised, and holds a market share of 8.3%. In 2021, the group launched a new proximity store concept, renewed its private label brand and strengthened its relationship with franchisees.
At group level, DIA has 6,800 private label SKUs, adding 2,000 new references in the last two years.
Turnover: €525 million (2022, estimated)
E.Leclerc is a French retail chain with a small presence in Portugal. With an estimated turnover of €525 million last year, according to Retail-Index, the company operates 21 stores in the country.
Turnover: €450 million (2022, estimated)
Discounter Aldi has been active in Portugal since 2006, ending 2022 with an estimated turnover of €450 million, according to Retail-Index. On average, the company opens around 20 stores per year.
Aldi Portugal is targeting 200 outlets by 2025 and recently rolled out a new proximity format, focused on urban centres.
The company does not disclose financial figures, but according to some estimates has a 4.2% market share in Portugal. Wolfgang Graff is the CEO of Aldi Portugal.
10. Makro C&C (Metro)
Turnover: €400 million (2022, estimated)
Makro C&C, part of the Metro Group, operates the Makro banner in Portugal.
With an estimated turnover of €400 million, according to Retail-Index, the company has ten stores in the country.
Retail-Index is a specialist supplier of management information on consumer retail markets, provided by Veraart Research Group in the Netherlands. Its mission is to supply managers with up-to-date key information on retail markets in Europe and support them in their international expansion.
The company dates back to 1964, when it started as a market research and marketing consulting company for consumer products and services. In 1989, it started publishing written reports on various retail sectors in Europe. As of 2005, it publishes its information on retailers through the online database and curated datasheet exports available on www.retail-index.com. A team of researchers manages the data to reflect upon current developments in the markets, collected from an extensive number of sources.
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