Alex Trelinski
MERCADONA is enjoying rapid growth in Spain, while the rest of the supermarket sector is stagnating- according to figures published by online portal El Economista.
In September, Mercadona’s sales volume grew by 4%, while the overall sector declined by 0.2%.
Its market share reached 27%, which is more than Carrefour, Lidl, Eroski, Dia, and Consum combined.
The retail group’s growth is being driven by a number of factors, including increased spending by residents and tourists plus a reduction in prices on around 500 products.
The company is also benefiting from the fact that many consumers are choosing to cook and eat at home more often due to high inflation.
Despite the drop in volume, the distribution sector in Spain grew 11.7% in value in the first nine months of 2023, which means that Mercadona’s revenue growth will be even greater.
Mercadona’s net sales volume grew 11% year-on-year to €28.5 billion in 2022, and the company is expected to break its revenue record this year- hitting over €30 billion.
In 2022, the retailer generated net profit worth €718 million, 5% more than the previous year.
However, this left the company’s profitability at 2.5%, one of the lowest in its history, and it is expected to remain low in the near future.
The rest of the Spanish grocery sector is facing a number of challenges, including high inflation, increased competition from Mercadona, and a change in consumer behaviour.
The Spanish association of supermarket chains (AECOC) predicts that sales volume in the sector will remain flat, or even slightly negative until next year.
In order to compete with Mercadona, other grocery chains are offering more promotions and discounts.
READ MORE:
- Mercadona to lower the price of 500 products until the end of the year
- Mercadona supermarket chain in Spain reports 5% rise in profits
