Mercadona: announces FY-2023 results and record investment

Valencia / ES. (msa) Spain’s Mercadona Group S.A. achieved revenues of 35,527 million euros in 2023 and will make a record investment of 10,000 million euros over seven years, the Spanish Group announced in its latest news release. The investment programme, which began in 2016, is the result of the company’s strategic decision, supported by its investors, to guarantee long-term benefits for the 5 main components – customers, employees, suppliers, society and capital.

  • The company’s brutal transformation has involved the implementation of the New Efficient Store Model, international expansion in Portugal, the roll-out of the Online Project, the optimisation of logistics centres and innovation in new IT tools and organisational models.
  • Having reduced the price of 1,000 products between April 2023 and February 2024, Mercadona will continue reducing prices for the rest of the year.
  • Mercadona has created 5,000 new jobs and now employs a total of 104,000 people in Spain and Portugal, with whom it has shared 600 million euros in bonuses, 50 percent more than the previous financial year.
  • In 2023, Mercadona’s efficiency, profitability and management improvements have led to a 40 percent increase in net profits, reaching 1,009 million euros, after paying 43 percent more in Profit Tax.
  • The company has allocated 80 percent of these profits to its continued efforts to maximise investments, planning to invest 5,000 million euros between now and 2028.

(Photo: Mercadona S.A. – Valencia 2024)

Physical supermarket and online sales company Mercadona saw consolidated sales increase by 15 percent in 2023 with revenues reaching 35,527 million euros. Of this total figure, 34,124 million euros correspond to the company’s business in Spain and the remaining 1,403 million euros to its business in Portugal, where Mercadona has 49 of the 1,681 stores making up the company’s network of supermarkets at the close of 2023. During the last financial year, Mercadona began to see the positive impact of its strategic decision taken in 2016, supported by its shareholders, to invest in the long term to guarantee benefits for the 5 components («The Boss» [customer], The Employee, The Supplier, Society and Capital), seen as a key factor for the future of Mercadona.

Record investments of 10,000 million euros over 7 years

This investment programme first started in 2016 as part of the company’s brutal transformation. Over the seven years since then, total investments have reached a record figure of 10,000 million euros, with the company investing 1,062 million euros in 2023. During this time, the company has refurbished and modernised 1,364 supermarkets in line with its New Efficient Store Model (Store 8), which features the new fresh section and Ready-to-Eat service and is three per cent more profitable than a conventional store.

In 2016, the company also began its internationalisation process with the announcement of openings in Portugal, where the project will start becoming profitable in 2024. The company also rolled out its productive and profitable Online Project and carried out the refurbishment and optimisation of its logistics centres, resulting in a current stock improvement of 2 days. Furthermore, the company has built new offices in Albalat dels Sorells (Valencia) and began its digital transformation, incorporating new IT tools and organisational models to help scientifically analyse all of its processes to improve efficiency and productivity.

(Table: Mercadona S.A. – Valencia 2024)

More customers, increased average purchase and greater market share

The projects carried out have led to the efficiency, productivity and profitability that Mercadona enjoys today and to the excellent results achieved in 2023, as demonstrated by the figures: more customers, with 2,400 store receipts per day, 200 more than the previous year, and a total market share in euros of 27.6 percent, an increase of 0.6 points. All this is thanks to the trust of the «Bosses» and their improved shopping experience, offering an efficient selection of conclusive quality at unbeatable prices, as shown by the more than 1,000 price reductions between April 2023 and February 2024.

More than 104,000 people committed to efficiency and productivity

As part of its commitment to generating stable, high-quality employment, Mercadona created 5,000 new jobs in 2023 (3,200 in Spain and 1,800 in Portugal), reaching an important milestone of 104,000 employees. Similarly, to ensure that the buying power of its staff is maintained, the company approved salary increases in line with the CPI (3.1 percent in Spain and 1.4 percent in Portugal), as well as performance-related bonuses linked to company profits and employee targets and objectives agreed with their managers at the start of the year. And owing to the year’s exceptional results, an additional half-bonus was approved as a result of the company’s improved management and efficiency, which consisted of the distribution of a total of 600 million euros amongst its employees, 50 percent more than the previous financial year.

«Yes to continuing to care for the planet»

Once again this year, Mercadona’s commitment to making a dynamic yet responsible contribution in the communities where it is present has led it to proudly say «Yes to continuing to care for the planet». As part of this commitment, the company has resolutely continued to develop policies focused on reducing emissions, achieving a certified reduction in emissions of 38 percent between 2015 and 2022, both in terms of emissions and greenhouse gases and indirect emissions through imported energy. The use of recycled materials for single-use sales packaging currently stands at 77 percent, and the company has continued to invest in the use of renewable energy sources. In particular, it has added a total of 224 new solar installations over the last financial year, representing a total investment of 42 million euros. Furthermore, the company has continued to work to help society’s most vulnerable groups through the donation of essential products, donating 23,100 tonnes of products to more than 762 charities in 2023.

(Table: Mercadona S.A. – Valencia 2024)

Historic tax contributions. An increase of 43 percent in Profit Tax

Mercadona’s tax contributions have once again reached historic levels, with the company paying more than 2,604 million euros in tax in Spain and Portugal, an increase of 15 percent. Specifically, VAT contributions have reached 487 million euros, an increase of 17 percent; employee Income Tax has reached 495 million euros, 12 percent more; and Profit Tax, at an effective rate of 23.3 percent, has reached 342 million euros, 43 percent more than the previous financial year.

All this has translated into net profits of 1,009 million euros, 40 percent more than in 2022, of which 100 million euros are due to the excellent management of the company’s cash reserves. Similarly, the company has maintained its commitment to sustained and sustainable growth without ever losing its focus on efficiency and productivity, as its margin has fallen by 1 point. As a result, it will allocate 80 percent of these profits, more than 800 million euros, to investing in maximising its economic and social impact in Spain and Portugal.

Investments of 5,000 million over the next five years

As part of its pioneering policy of reinvesting profits to continue building the company’s resources, Mercadona has decided to invest 5,000 million euros over the next five years – 1,100 million in 2024 – another 1,000 people. Furthermore, as part of its commitment to offering «The Boss» conclusive quality at unbeatable prices, the company will continue to improve efficiency and seek market opportunities along with its more than 3,000 specialist suppliers and intersuppliers in order to continue passing on cost reductions to sales prices over the entire year.