Advancing in its “transformation plan” to promote a more digital, more productive, more socially responsible, more sustainable and more conscious company model on its responsibility in contributing to improve the social and economic environment.
- Last 2 July, Mercadona reached an historic milestone with the opening of its first supermarket in Portugal, joined by 9 more stores, which allows it to end the year with 10 supermarkets, 900 people and more than 300 Portuguese suppliers, after investing 150 million euros in 2019.
- Mercadona ended last year with a workforce of 90,000 people with a permanent contract, after creating 4,200 new stable and high-quality jobs, 600 of them in Portugal; a network of 1,636 supermarkets and a total of 1,400 specialist Totaler Suppliers.
- For yet another year, it has continued to boost shared growth and has distributed the total profit generated in 2019 as follows: 340 million euros among workers as a bonus for reaching targets; 282 million for Society in the form of taxes, with an effective corporate tax rate of 18%; 493 million reinvested in the company as equity; and 130 million among its nine shareholders via dividends. All this has raised the company’s net profit to 623 million euros, 5% more than the previous year.
- In 2019, Juan Roig and Hortensia Herrero proceeded, as they have been doing for a decade, to reinvest and share with society an important part of the dividends they receive in their personal equity. Specifically, 50 million euros, through the Legacy Project in its different initiatives: Marina de Empresas, Fundación Trinidad Alfonso, Valencia Basket Club, L’Álqueria del Basket, Licampa 1617 (València Arena) and Fundación Hortensia Herrero; and in 2020 they plan to share and invest another 76 million euros.
Mercadona, physical and online sales supermarket company, has increased its investment in 2019 by 46%, to 2.2 billion euros. This investment effort, carried out using its own resources, is part of its 2018-2023 transformation plan to promote a more digital, productive, socially responsible and sustainable company model, involved in promoting shared prosperity, aware of its responsibility to contribute to improving the social and economic environment.
In 2019, and thanks to its determination to surprise its “Bosses”, as Mercadona internally calls its customers, the company has experienced an improvement in consolidated sales at 5% in constant surface area, up to 25.5 billion euros. And as a consequence of its commitment to the satisfaction of “The Boss”, with new products and constant improvements in service and quality at the best price, the company has experienced an increase of more than 80 receipts per store and average day, which represents an accumulated three-year increase of 205 store receipts per day.
During these twelve months, Mercadona, after opening 46 supermarkets, 10 of them in Portugal, and closing 46 stores that could not be adapted to the new more efficient and sustainable model due to their characteristics, has ended the year with 1,636 supermarkets. It has also maintained the renovation process of its supermarket network and ended the year with 800 New Efficient Store Model (Store 8) supermarkets, after renovating 351 stores. Aware of the demands of its customers for local products, which bring more freshness and quality to the assortment, it has continued to make progress in the renovation of its fresh sections, with the Global Fresh Products strategy, with all the improvements and innovations to the fresh sections reaching more than 1,300 supermarkets.
In this process of constantly adapting to the needs of customers, 319 supermarkets now feature the new “Ready-to-Eat” section (“Pronto a Comer” in Portugal), which has also reinforced its assortment with new local dishes and the incorporation of hot and cold drinks. The new areas are also set up with tables and chairs that the company provides at some of their stores so that the “Bosses” can consume products purchased in the supermarket. This initiative has been a big opportunity for more than 120 new specialist suppliers to join this open project because, according to Juan Roig, “to adapt to new solutions, offer local dishes and guarantee quality every day, we are going to need more specialist suppliers”.
This need for specialisation led Mercadona, in 2019, to advance its evolution towards the Totaler Supplier concept, initiated last year, and to continue building an open and socially responsible project that brings agility and shared knowledge. At the end of the year, the company now collaborates with 1,400 Totaler Suppliers, the specialisation of which has allowed the company to offer products as a result of the co-innovation experience with customers and with an indispensable challenge: quality, quality, quality and, above all, quality as the key distinguishing feature of the assortment.
An historic milestone for Mercadona, going international
On 2 July 2019, Mercadona reached a new milestone in its history with the opening of its first supermarket in Portugal, specifically in Canidelo, Vila Nova de Gaia, in the district of Porto. With this opening, to which 9 more stores have been added, the last two openings in December, located in the districts of Porto, Braga and Aveiro, the company has made its internationalisation process a reality, announced in 2016 and which has been built for three years thanks to the effort of 900 workers and 300 Portuguese suppliers.
Their daily collaboration has helped us to build an assortment for and with the Portuguese “O Chefe” (Boss) and to achieve, in this first year, a total turnover of more than 32 million euros. To this we must add the company’s investment effort for the development of this project, standing at over 220 million euros since it began. Of this total, 150 million euros were invested in 2019, an amount that has been allocated to the opening of new stores, the acquisition of new land and the implementation of the Póvoa de Varzim Logistics Centre, among others.
Digital transformation, sustainability and online sales
The digitalisation of the company has been another one of the important challenges that Mercadona has worked on in 2019. With an investment of more than 160 million euros, the company has completed the first phase initiated in 2018 to digitalise supermarkets and make them more efficient, productive and sustainable. The digital transformation process has also allowed us to introduce improvements in the customers’ purchasing, with greater agility and warmth, as well as in the collection and ordering processes of the employees, currently with more intuitive and productive tools. Likewise, with the incorporation of new applications and monitoring systems for the different machines and facilities, the company’s sustainable development has been reinforced through the reduction and optimisation of power consumption. To all this we must add the investment of more than 44 million euros for the new Data Processing Centre (DPC) located in Villadangos del Páramos (León).
Likewise, and in this constant process of technological advancement, Mercadona has invested more than 8 million euros to be able to launch its second online “Hive” in June 2019, a warehouse in which the preparation and distribution of orders is centralised online in Barcelona (Zona Franca Industrial Park), where more than 50 postcodes are served. This second hive joins the one located in Polígono Vara de Quart (Valencia), opened in 2018. With a combined turnover of more than 6 million euros per month and a staff of 540 people, the company positively assesses how the online sales model is evolving and will start the online service in Madrid during the first half of 2020. To carry out this necessary digital transformation project, Mercadona began a process of internal and external talent acquisition, which will continue in 2020 and which has allowed 200 people to be incorporated into the IT department in 2019, to end the year with a team IT staff composed of 700 specialised professionals.
Shared growth, creation of employment and equality
The pursuit of all the targets has allowed the company to reach the goals established and raise its net profit in 2019 to 623 million euros (5% more than the previous year), as the result of the effort of all those who are part of the project. To recognise this work and involvement, and true to its principle that “shared success tastes better”, Mercadona has distributed 27% of its total profit generated among the employees of the workforce, specifically 340 million euros, as bonuses for reaching targets. In addition, another 23% of earnings, 282 million euros (2 million euros in Portugal), have been returned to Society in the form of taxes, with an effective corporate tax rate of 18%; while 40%, in total 493 million euros, has been reinvested in the company as equity, and the remaining 10%, 130 million euros, has been distributed among shareholders in the form of dividends.
As a result of this growth, and in order to continue promoting the transformation process initiated, in 2019 the company created a total of 4,200 new permanent jobs, 3,600 in Spain and 600 in Portugal, now reaching a workforce of 90,000 people, 89,100 in Spain and 900 in Portugal. Likewise, it has continued to promote measures of a social nature, as reflected by the fact that in 2019, a total of 2,284 working parents decided to extend their legally established parental leave by 30 days; and that 15,899 workers have took advantage of reduced working hours. Along this same line, and within its equality policy, it should be noted that as of 2019, 62% of the workforce are women; in addition, 47% of management positions, a total of 1,877, are led by women.
Actively committed to the environment “saying YES to taking better care of the Planet”
Mercadona has continued to promote its responsible business model and has reinforced its commitment to supporting the environment through the incorporation of measures to produce sustainably and achieve a more positive environmental impact, which has meant an investment effort of 44 million euros in 2019. The company, which applies the principles of the circular economy in a variety of processes, is aware that it still has much to improve upon to respond to what Society and the “Bosses” demand. For this reason, it takes on the responsibility of “saying YES to taking better care of the Planet”. All of us who make up Mercadona individually and collectively take on this commitment with our suppliers and “Bosses”.
Mercadona’s own environmental management system works actively to adapt to environmental and social challenges. The company is immersed in several projects that seek a common goal: to take better care of the environment. Mercadona is focused on the company’s internal processes becoming able to do more with less of an impact, as well as finding solutions that take into account the ecological factor. The efforts are focused on sustainable logistics, energy efficiency, waste management and plastic reduction.
Sustainable logistics, the objective of which is to increase the efficiency and sustainability of the transport fleet, involve using fuels that reduce pollution and new technologies for the management and planning of supply routes. The company has significantly improved energy efficiency thanks to the reduction of greenhouse gas emissions, the development of the replacement plan for refrigerant gases throughout its facilities and appropriate water management. In addition, significant efforts are being made to reduce plastics and waste. In this sense, the first objective, which has already been achieved, has been to completely eliminate single-use plastic bags in the checkout area, which have been replaced by three reusable, sustainable bags: raffia bags, reusable and recyclable paper bags, and recyclable plastic bags made from recycled plastic from Mercadona’s internal processes. As a result, we have been able to reuse more than 8,000 tonnes of plastic per year, added to other movements such as the incorporation of plastic recovered from agricultural uses in the Bosque Verde household care and cleaning area, which Mercadona launched in collaboration with its supplier, SP Berner, 10 years ago.
These initiatives are part of an ambitious project the objective of which is to rethink the role that plastic plays in the processes of both the agri-food chain and Mercadona and its suppliers, moving towards the objectives of the circular economy and encouraging the development of new packaging materials. A fundamental part of this process has been the audit that ITENE (Technological Institute of Packaging, Transportation and Logistics) has carried out on all the packages that the company currently uses in its recommended products, and which has led Mercadona to approve a strategy (internally called 6.25) to reduce plastic, with 6 actions and the objective to hit 2025 having fulfilled a triple objective: reduce 25% of plastic in the Mercadona brand containers (eliminating anything that does not add value, incorporating recycled material, etc.), have all of them be recyclable or compostable by this same date and have the company, which currently separates and sends to be recycled more than 70% of all the plastic waste it generates, reach 100% in the same time horizon, avoiding waste to the greatest extent possible.
Investment of 1.8 billion euros in 2020 to promote the Mercadona of the future
To consolidate its development and lay the foundations of the Mercadona of the future, the company will continue to promote its 2023 transformation plan and to this end, it plans to invest 1.8 billion in 2020, which will be used mainly to open up new supermarkets, 69 in Spain and 10 in Portugal; to renovate 160 supermarkets to adapt them to the New Efficient Store Model (Store 8); to continue developing the Global Fresh Products project, and to implement the new Ready-to-Eat section in an additional 460 supermarkets throughout the year.
Also, Mercadona plans to continue to strengthen and optimise its logistics network with the renovation and opening of new logistics centres; and will continue to allocate significant resources towards digital transformation, another one of the company’s challenges, and to the opening of a new online warehouse (Hive) in Getafe (Madrid). For all this, the company will create more than 2,000 stable and high-quality jobs in 2020, between Spain and Portugal.
The president of Mercadona, Juan Roig, stated that “in 2019, with ‘The Boss’ as our constant guiding light, we have continued to consolidate the drastic transformation that Mercadona is going through, reaching a historic milestone for all those who make up the company, going international in Portugal last July. All this, like the challenges we still have ahead of us, could not be achieved without the true strength of Mercadona’s transformation: the 90,000 people, 900 of them in Portugal, who with their talent, effort and leadership are building a company that is increasingly aware of its role to contribute to improving the social and economic environment by producing efficiently and responsibly in order to generate shared prosperity.” In view of this unwavering commitment, “all of us who are part of Mercadona have set a clear challenge for ourselves in 2020: Saying YES to taking better care of the Planet”.
Juan Roig and Hortensia Herrero Legacy Project
In addition, Juan Roig has proceeded to detail how both he and the Vice-president of Mercadona, Hortensia Herrero, share and reinvest an important part of their dividends and personal assets in society; 50 million euros in 2019, through the Legacy Project in its different initiatives; Entrepreneurship, Training, Sport, Entertainment, Art and Culture; and with 76 million euros expected to be invested in 2020.
This commitment, which began a decade ago, was born from their shared conviction that “true success comes from the generosity of sharing and making available to others the knowledge and resources that everyone has”. This has been exemplified through Marina de Empresas, Fundación Trinidad Alfonso, Valencia Basket Club, L’Alqueria del Basket, Licampa 1617 (Valencia Arena) and Fundación Hortensia Herrero, among others.