Spain’s Mercadona has built a powerful position in Portugal, but the latest figures suggest that Lidl is proving much harder to catch than expected. The real question is whether Mercadona can turn rapid expansion into lasting market power.
Mercadona entered Portugal in 2019 with a clear ambition: reproduce the formula that made it one of Spain’s most successful supermarket groups and gradually build a nationwide network. The strategy has worked to a significant degree. Mercadona has become the country’s fourth-largest grocery retailer and generated €2.1 billion in Portuguese revenue in 2025.
But 2026 has brought a more complicated picture. The latest Worldpanel figures show Continente still leading Portugal with 27.6% of the food-retail market, followed by Pingo Doce at 22.3%. Lidl has 13.8%, while Mercadona stands at 7.4%, with its share slipping by 0.1 percentage point. More importantly, the latest figures suggest that Lidl is widening its lead over Mercadona at precisely the moment when the Spanish retailer is trying to accelerate its Portuguese expansion.
Mercadona thought Portugal would be familiar territory
On paper, Portugal should have been a natural market for Mercadona. It is next door to Spain, consumers share many cultural similarities, and the retailer already had a highly developed operating model across the border. Mercadona could bring its private-label strategy, store format, product range and customer proposition into a neighbouring country without starting completely from scratch.
The company has continued to invest heavily. In 2026 it plans to open twelve Portuguese supermarkets, three more than in 2025, while entering four new districts. Mercadona’s penetration among Portuguese households has also continued to rise, reaching 61.5%, although it remains significantly below Lidl, Pingo Doce and Continente.
That last figure is important because it shows that Mercadona is not failing in Portugal.
Quite the opposite.
It is growing.
The problem is that Lidl is already deeply embedded in the Portuguese consumer’s shopping routine.
Lidl has something Mercadona cannot buy overnight
Lidl has been operating in Portugal for decades. It has built a substantial store network, established relationships with consumers and developed a strong reputation around value.
Mercadona, by comparison, is still building its presence.
That creates an interesting competitive situation. Mercadona can open stores quickly and invest heavily, but consumer habits are much harder to change than property portfolios.
A shopper who already has a Lidl five minutes from home does not necessarily need another supermarket.
Mercadona therefore has to persuade that customer that changing where they shop is worthwhile.
That is much harder than simply putting another store on the map.
The Lidl challenge is about more than price
It would be easy to describe this as another discount supermarket battle.
But that would miss the more interesting point.
Lidl has evolved beyond the traditional image of a hard discounter. Its stores increasingly combine private label, fresh produce, bakery, household goods and rotating promotional products with a shopping experience that consumers understand.
Mercadona has followed a somewhat similar philosophy, particularly through its powerful own-brand portfolio.
That means the two companies increasingly occupy some of the same competitive territory.
They are both asking consumers to trust their own products rather than relying heavily on the famous international brands traditionally associated with supermarkets.
And that makes Portugal a fascinating laboratory for the future of European grocery retail.
Mercadona’s biggest weapon may be private label
Mercadona’s model is heavily built around its own brands, including Hacendado, Bosque Verde and Deliplus. This gives the company significant control over product development, pricing and positioning.
It also allows Mercadona to create a supermarket experience that is difficult to compare product by product with conventional retailers.
The shopper is not simply choosing between Coca-Cola and Pepsi.
They are choosing between Mercadona’s own products and the alternatives available elsewhere.
That can build loyalty.
But Lidl has developed its own powerful private-label proposition, meaning Mercadona cannot simply arrive in Portugal and claim the own-brand space for itself.
The battle is already occupied.
And then there are Continente and Pingo Doce
The biggest danger for Mercadona may actually be that Portugal’s market is not a two-way race.
Continente remains the country’s largest food retailer, while Pingo Doce is close behind. Together they accounted for exactly half of Portugal’s food-retail market in the latest figures.
Both have something Mercadona and Lidl have to respect: enormous familiarity with Portuguese shoppers.
This makes Portugal one of Europe’s most competitive supermarket markets.
Mercadona is not simply trying to defeat Lidl.
It is trying to gain ground in a market where two powerful domestic operators already dominate and several other international and regional chains are competing for the remaining share.
The interesting question is what happens next
Mercadona’s current position should not be interpreted as a defeat.
The company has only been in Portugal since 2019, and its store network is still being expanded. Its Portuguese revenue reached €2.1 billion in 2025, showing that the business has already achieved substantial scale.
The more interesting question is whether Mercadona can eventually reach the same level of household penetration it enjoys in Spain.
That will require much more than opening stores.
It will require convincing Portuguese consumers to make Mercadona part of their regular shopping routine.
And that takes time.
The next stage could become a property battle
As Mercadona expands, the competition for good supermarket locations will become increasingly important.
The best sites are limited.
A supermarket needs population density, visibility, accessibility and enough surrounding households to justify the investment.
If Mercadona wants to accelerate its growth, it will increasingly find itself competing with Lidl, Continente, Pingo Doce, Aldi and other retailers for exactly the same locations.
That could create a second battle alongside the market-share battle.
The battle for the best supermarket real estate in Portugal.
Portugal could become a test for Mercadona’s international model
This is perhaps the most important part of the story.
Mercadona has demonstrated that its model works extraordinarily well in Spain. According to Worldpanel data, it held 19.7% of the Spanish food market in 2025 and was the fastest-growing major chain, increasing its share by 0.7 percentage points.
Portugal is therefore a test of something much bigger.
Can Mercadona reproduce its Spanish success outside Spain?
If it can, Portugal could become the beginning of a broader international growth story.
If it cannot, the company may discover that a successful domestic supermarket formula does not automatically translate into another country’s shopping habits.
That distinction matters for the entire European supermarket industry.
Lidl has already learned the international lesson
Lidl’s advantage is that it has spent decades building an international model.
The company understands how to operate across different countries while maintaining a consistent core proposition.
Mercadona has historically been much more concentrated in Spain.
Portugal therefore represents something different for the company.
It is not simply another market.
It is a test of whether Mercadona can become a truly international supermarket operator.
The consumer will decide
Ultimately, the battle will not be decided by the number of stores opened or the amount invested.
Portuguese shoppers will decide.
They will decide whether Mercadona’s products are good enough.
Whether its prices are competitive enough.
Whether its locations are convenient enough.
Whether its private-label products deserve a place in the weekly shopping basket.
And whether it offers something that Lidl, Continente and Pingo Doce cannot.
That is where the real battle begins.
The ISN View
Mercadona’s Portuguese expansion is still a success story, but the latest figures introduce a warning that should not be ignored.
The company is growing, but Lidl remains considerably ahead, while Continente and Pingo Doce continue to dominate the market. Mercadona’s share slipping slightly in the latest figures makes the situation even more interesting because it suggests that simply opening more stores will not guarantee continued market-share gains.
Portugal may therefore become one of Europe’s most important supermarket battlegrounds.
Mercadona brings Spanish scale, private label and a proven operating model. Lidl brings decades of Portuguese experience and a powerful discount proposition. Continente and Pingo Doce bring deep domestic roots.
And somewhere between them is the Portuguese consumer, who has never had more choice.
The next few years will reveal whether Mercadona is simply another successful foreign supermarket entering Portugal — or the beginning of a much bigger European expansion story.
For Lidl, however, the message is already clear.
Mercadona is coming. But catching Lidl will be much harder than opening the doors.