In a year as hard and complex as 2020, Mercadona has achieved the best management in its history, thanks to the 95,000 people who make up the Mercadona Project who have shown with their effort and resilience that in extraordinary times, extraordinary people show up.
- Mercadona created 5,000 new jobs, an average of 16 per day, ending the year with a staff of 95,000 people with permanent contracts.
- The company has invested more than 1.5 billion euros, funded by its own resources, to accelerate the brutal transformation it is undergoing and to promote a more digital, productive and sustainable company model.
- After sharing 409 million euros in bonuses with its staff, representing more than 25% of the total profits generated, and 364 million with Society through taxes (29% more than in 2019), the company recorded a net profit of 727 million euros (+17%).
- In 2020, Juan Roig and Hortensia Herrero allocated 70 million euros of their dividends to reactivating the economy of the Valencian Community and Spain, and plan to increase this contribution in 2021 by 45% to 100 million euros, “because knowledge and money bring happiness... if you share them”.
Mercadona, a physical and online supermarket company, has increased its consolidated sales in constant surface area by 5.5% in 2020, up to 26.932 billion euros, of which 186 million correspond to the sales of its 20 stores in Portugal. The company recorded a net profit of 727 million euros, a gain of 17%, after having shared 409 euros in target bonuses with its staff and 364 million euros with Society in taxes, an increase of 29%. These results are a clear indication of the determination with which Mercadona is carrying out the brutal transformation it is currently undergoing to promote a more digital, productive and sustainable company model.
To do so, and in order to accelerate this major change, Mercadona invested more than 1.5 billion euros in 2020, an investment effort funded by its own resources, as part of its 2018-2023 strategic plan.
As a result of this investment, Mercadona ended the year with 1,641 supermarkets, after opening 70 supermarkets, 10 of them in Portugal, and closing 65 stores that did not adapt to its new more efficient and sustainable model. It has also continued the process of renovating its supermarket network and ended the year with 1,000 supermarkets adapted to the New Efficient Store Model (Store 8), after renovating 152 stores. The company has also continued to implement the new “Ready-to-Eat” section (“Pronto a Comer” in Portugal), ending the year with the new section in 650 stores, 20 of them in Portugal.
5,000 new jobs created: an average of 16 new jobs every day
The investment effort made, in addition to generating wealth and business, has materialised in the creation of 5,000 stable and high-quality jobs, of which 4,200 are in Spain and 800 in Portugal, finishing the year with a staff of 95,000 people, 93,300 in Spain and 1,700 in Portugal.
In order to continue advancing with actions and pioneering initiatives in the area of work quality and work-life balance, Mercadona has made further progress on the implementation of the new five-day work week for its supermarket staff. This measure, known internally as the 5+2 Work Week, gives store employees two full days off a week, and eight long weekends (Saturday, Sunday and Monday) a year. With this, the company has taken another step forward in the area of work-life balance, giving all store employees an annual calendar with all their days off planned out, an innovative tool within the distribution sector.
Managing COVID-19: In extraordinary times, extraordinary people show up
In response to the situation resulting from the State of Alarm declared on 14 March 2020, within 36 hours Mercadona had adapted its more than 1,600 supermarkets and the rest of its logistics facilities, Hives (warehouses exclusively for online sales) and offices, with two main objectives: to protect the health and safety of the “Bosses” (how customers are known internally) and the 95,000 employees; and to guarantee the supply, after the distribution sector was declared to be an essential service.
The company implemented more than 100 initiatives at a cost of 200 million euros to carry out this commitment. To guarantee health and safety it provided hygiene and prevention items like disinfectant gel, paper and gloves, and it ramped up disinfection and cleaning processes. It also provided employees with masks and safety goggles and installed methacrylate protective screens at the tills. It decided to suspend services like Teleshopping, online orders prepared and served from stores, Ready-to-Eat, cured ham cutting station and freshly-squeezed orange juice; and it redesigned some businesses, including the bakery. These services were gradually brought back between the months of August and October, as health and safety conditions for the “Bosses” and employees permitted.
Likewise, to help the staff feel healthy and safe, the human resources and IT departments developed a new telephone service called 3C (COVID Call Centre), providing 24 hour information to Mercadona employees regarding any questions about the disease.
Thanks to the staff's involvement, the company was able to overcome the different scenarios it faced right from the beginning of the pandemic. That is why, to recognise the extraordinary effort that the 95,000 staff members were making to satisfy “The Boss”, an extraordinary bonus of 43 million euros was distributed in April of 2020.
Also, to provide greater liquidity to suppliers, the confirming lines were expanded to a value of 2.1 billion euros with several banks. This made it possible to advance payments to suppliers and facilitated access to financing, helping guarantee supply and the stability of a combined workforce of more than 600,000 people. Suppliers are one component that worked constantly to stay in business and help keep the wheels of the economy turning.
Aware of the social impact being generated by COVID-19 and its social and economic consequences, the company strengthened its charitable commitment in 2020 to provide an agile and firm response to the demands of those most in need. It did so through the largest food donation made by Mercadona to date, as befits such an exceptional moment in time: 17,000 tonnes of products during these twelve months to soup kitchens, food banks and other charities, with 15,800 going to Spain and 1,200 to Portugal. These donations double what was given in 2019 and were distributed among 290 soup kitchens, more than 60 food banks and other social entities and charitable organisations. The company also provided other particularly significant assistance, like delivering food in March and April to the field hospital built by the Community of Madrid at IFEMA.
Mercadona President Juan Roig stated that “2020 has been a hard, strange and difficult year, reconfirming that the true strength of the company's transformation is the people who make up this project. Despite moments of uncertainty, we have all been able to overcome our fears, make courageous decisions and work as a team to open the company’s more than 1,600 supermarkets every day. In extraordinary times, extraordinary people show up; the personal effort and resilience of the 95,000 staff members, and the 3,000 suppliers and their employees, are a model and an example for society”.
The best management in Mercadona's history. Digital transformation and sustainability
To make firm progress in its digital transformation, in 2020 Mercadona continued working on developing its online shopping service, launched in 2018, with the opening of its new Madrid Hive in April 2020, right in the middle of the lockdown. The new online distribution centre has required an investment of 12 million euros and joins the company's other Hives located in Barcelona and Valencia. This constant adaptation effort of the more than 1,400 people who form Mercadona Online to stay connected and anticipate the needs of “The Boss” online led the company to register 176 million in revenue through this channel.
Additionally, the company has continued strengthening productivity and information security by equipping its IT system with the most advanced technologies. To do so, it has invested 18 million euros to finalise the migration of financial processes, such as in-store sales, supplier payments and cash flow management, to the SAP S/4HANA system and SAP Fiori, optimising them by standardising applications and making a large volume of information more accessible from the cloud. It also completed the transfer of IT programs to the Data Processing Centre in Villadangos del Páramo (León).
Aware of the need to accelerate and contribute to continuing to protect the planet, the company has not been slowed by the pandemic and remains committed to renewable energies with ongoing investments under a sustainable strategy. Over the course of the year, it has installed solar panels in 8 stores and has developed green logistics to continue reducing its emissions, as well as joining AECOC's Lean & Green initiative to reduce overall emissions by 30% in 2023. It has also accelerated its commitment to move towards a greener Mercadona, activating its Strategy 6.25 in 70 stores through six actions with the triple objective for 2025 of reducing plastic by 25%, making all packaging recyclable and recycling all plastic waste. This project is currently present in more than 600 stores, where the company not only informs and educates its customers and employees about recycling and sustainability, but also informs them about its actions.
A 1.5 billion euro investment in 2021 to activate the economy
Mercadona will continue to drive forward its 2018- 2023 transformation plan, and to do so it expects to invest 1.5 billion in 2021, which will be used mainly to open up 97 new supermarkets, 88 in Spain and 9 in Portugal; to renovate 88 supermarkets to adapt them to the New Efficient Store Model (Store 8); and to implement the new Ready-to-Eat section in an additional 200 supermarkets. It will also continue to optimise its logistics network with the renovation and opening of new logistics centres, and will allocate significant resources towards the digital transformation, another one of the company's challenges, and towards strengthening the online model. In doing this, the company will create more than 1,600 stable and high-quality jobs in 2021, between Spain and Portugal.
Mercadona President Juan Roig stated that “2021 and 2022 are going to be very difficult years, and although there is much uncertainty, there is even more eagerness to get through them. Therefore, our commitment, which I am very proud of, is to continue giving the best of each and every one of us without waiting to be asked, convinced that if 95,000 of us work together we can achieve any goal. Because in addition to the talent of the extraordinary team and the major advances being made in digitalisation, a company needs leadership capable of making all the necessary changes; otherwise, it will disappear. Changes that include doing anything and everything to guarantee excellent quality at an unbeatable price, and continuing to promote an ecosystem of values and actions centred on benefiting people, society and the planet”.
Juan Roig and Hortensia Herrero Legacy Project
Juan Roig has also detailed how both he and Mercadona Vice-President Hortensia Herrero share and reinvest an important part of the dividends from their Mercadona shares and their personal assets in society: 70 million euros in 2020, an increase of 40%, through the Legacy Project in its different initiatives (Entrepreneurship, Training, Sport, Entertainment, Art and Culture) and a planned investment of 100 million euros in 2021.
This commitment, which began over a decade ago, was born from their shared conviction that “knowledge and money bring happiness… if you share them”. This has been exemplified through different charitable and sustainable projects such as Marina de Empresas, Fundación Trinidad Alfonso, Valencia Basket Club, L’Alqueria del Basket, Licampa 1617 (Casal España Arena de València) and Fundación Hortensia Herrero.
Mercadona president Juan Roig following the 2020 Press Conference.
Mercadona president Juan Roig following the 2020 Press Conference.
Juan Roig and members of the Mercadona Management Committee at the Jarro Co-innovation Centre in Paterna, Valencia.
Header image: Juan Roig and members of the Mercadona Management Committee at the Jarro Co-innovation Centre in Paterna, Valencia.