A year of growth in terms of employment and turnover is consolidated thanks to the development of the “Effective Selection” strategy, investing in innovation, promoting fresh products and collaborating with integrated suppliers and specialist suppliers in order to satisfy and surprise the clients
- Having created 4,000 new stable quality jobs, the company closed 2016 with 79,000 employees in its workforce. Mercadona’s fiscal contributions, via taxes and Social Security, reached 1,468 million euros in 2016.
- Two of the great milestones for Mercadona in 2016 were the announcement of the company’s internationalisation, by entering the Portuguese market, and the inauguration of the New Efficient Store Model.
- The company’s net profits grew by 4% to 636 million euros, investments reached 685 million euros, and the sales in terms of volume rose by 4%, to 11,071 million kilos and litres (kilitres).
- For another year running, the company shared its total profits between its components: 300 million among its employees by way of performance-related bonuses and 250 million with Society, through taxing. Moreover, from the net profit, 515 million were reinvested in the company as equity capital, while the rest was divided among the shareholders by way of dividends.
- To achieve its goals for 2017, Mercadona foresees the largest investment in the company’s history: between 1,000 and 1,200 million euros. “In addition, Mercadona has decided to sacrifice net profit by up to 200 million euros, which represents a third of the net profit for 2016, with the objective of setting the bases for the Mercadona of the future”. According to Juan Roigs´s statement.
By generating 4,000 new permanent jobs, in 2016, Mercadona has reinforced its commitment towards stable, quality employment, and in this way, the company’s workforce now stands at 79,000. Its quest for creating employment is in line with the premise that the more committed and satisfied the employee is, the more satisfied “The Boss” (as the company refers to its clients internally) is, the more sales are generated, and this in turn creates more employment and wellbeing in society. This is a reality Mercadona has proved once again in 2016, increasing its turnover by 3.9% to reach 21,623 million euros, in contrast with the 20,831 achieved in 2015.
In terms of volume, sales have risen by 4% to reach 11,071 kilos and litres (kilitres), while the company’s net profit has reached 636 million euros, 4% more than in 2015.
In line with this, Mercadona has reinforced its investments, which have reached 685 million euros in 2016. This amount was invested in opening 50 new supermarkets, whereby its network grew to 1,614 stores, and a further 35 were refurbished. Additionally, the investment has allowed the building works for the Abrera Logistics Block (Barcelona) to continue, with several of its stages already in operation, and to continue with those of the Vitoria-Gasteiz Logistics Block and the Data Processing Centre in Villadangos del Paramo (Leon). Also in regards to investment, the company has acquired the Parc Sagunt plot in Sagunto, Valencia, for the construction of its main regulating logistics block.
It is within this sustained commitment towards the creation of wealth, employment and investment in society that the company’s tributary contribution takes place, which in 2016 was 1,468 million euros. From this total amount, 693 million euros correspond to Social Security contributions, 250 to corporation taxes, and 525 to VAT and Personal Income Tax.
Sharing the profits generated
By following the principle of “success is sweeter when it is shared”, and applying the 25/25/40/10 formula for another year. From a total profit of 1,186 million euros generated, for another year running, Mercadona has shared 25% among the workforce: 300 million euros by way of performance-related bonuses; a further 25% of the profits, 250 million, have been reverted to Society by way of taxes; 40%, that is to say, 515 million, have been reinvested in the company as equity capital, and the remaining 10% have been shared among the shareholders by way of dividends.
The value of prescription: Satisfying and surprising “The Boss”
In 2016, Mercadona has increased collaboration in conjunction with suppliers, integrated suppliers and clients alike, to continue to satisfy and surprise “The Boss”. To this end, it has reinforced its strategy of achieving an Effective Selection, including more than 300 novelties and 350 improvements to products, which have been very well received and that are born from a collaboration between all the chain’s components; these have secured new product launch success rates that are 4 times higher than the average scores for the sector. Good examples of this collaboration and of the active listening exercised are, for instance, the freshly-squeezed orange juice, an initiative that is selling on average 50 litres per store per day, which will total 75 million kilos of oranges in 2017 and the Sushi service, which is currently implemented in 17 stores, and sells on average 105 units per store per day. This is also showcased by the introduction of what are known as superfoods, which are products that are high in nutrients and beneficial for one’s health, including chia seeds, quinoa, kale, edamame, black garlic, matcha tea and others.
Similarly, the strategy of specialising the assortment further, which was started in 2012, has been reinforced with the objective of offering the very best quality at the lowest possible price, which will mean a continued increase in staff in the prescription and purchasing departments in 2017.
At year-end 2016, the company had collaborations in place with 126 integrated suppliers and more than 500 specialist suppliers, which through prescription and mutual collaboration, have allowed for producing fresher, more local and specialised products, which essentially better adapt to the expectations and habits of the “Bosses”.
Work-life balance and a commitment towards the wellbeing of the employees
The company has continued to show its commitment towards the wellbeing of its employees, by fostering a healthy work-life balance. From among these initiatives, worthy of mention is, the fact that in 2016, 5% of female employees decided to become mothers, or that 2,552 working mothers have prolonged the legally-established four months’ maternity leave by an extra 30 days. Also during the course of the year, 17,800 employees of both genders have enjoyed shorter working days, while in some of these cases, their children have been attending the free nursery schools the company has opened in four of its logistics blocks since 2001, located in Huevar del Aljarafe (Seville), San Isidro (Alicante), Ciempozuelos (Madrid) and Abrera (Barcelona).
As a consequence of these measures, added to Mercadona’s commitment towards fostering quality employment and professional development, the company’s Human Resources policy has been praised by the UN’s International Labour Organisation (ILO). In its publication “Non-standard Employment Around the World”, the way in which Mercadona manages its workforce is hailed as one of the keys to its strategy of competitiveness.
The impact of Mercadona’s economic activity: 16,055 million euros of purchases in Spain
Through its activity, and its sustainable support for the Spanish food and primary sectors, Mercadona contributes towards boosting the Spanish economy. This is showcased through the purchases made, which in 2016 increased by 4% to 16,055 million euros, which means that 12 out of every 100 euros spent in the Spanish food industry are disbursed by Mercadona. To the foregoing, we must add the industrial cluster of integrated suppliers and specialist suppliers that collaborate with Mercadona, and who, through their activity and investments, also help energise our country’s economy. In 2016, this cluster was responsible for creating 3,154 new jobs, ending the year with a total of 48,728 employees, 245 factories and a joint investment of 560 million euros. This has allowed for the incorporation of new facilities, as well as for starting up 65 production lines and new factories.
All of this reflects the impact of the company’s contribution, together with its production chain, CASPOPDONA, on the Spanish economy. This contribution represents 1.8% of the GDP (20,100 million euros), 3.8% of the total jobs that exist in Spain (660,000 employees), and the company carried out 85% of its purchases within the country.
Commitments for 2017: A record investment between 1,000 and 1,200 million euros to transform Mercadona
With the objective of continuing to grow in the mid to long term, Mercadona intends to carry on promoting the main strategies started in 2016 through into 2017, adopting them as its new sales model, for which it plans to double its investment in training, reaching 100 million euros.
In addition, Mercadona will initiate the study for the company’s Online Project and will continue to develop its expansion into Portugal, where it has already acquired the land for one of the 4 stores it plans to open in 2019. Simultaneously, it will quadruple its investment in maintenance and refurbishment of 126 supermarkets, along with the opening of 30 new stores, in order to boost the implementation of the company’s New Efficient Store Model, where “The Boss” will benefit from improved service, more space and comfort, and a better distribution of the assortment.
It will further continue the construction works for the Data Processing Centre in Villadangos del Paramo (Leon). In terms of logistics, it will start the construction of the new platform, which will become the company’s main regulating logistics block in Parc Sagunt, in the municipality of Sagunto (Valencia), and it will further continue with the construction of the Vitoria-Gasteiz block and Abrera block, in Barcelona.
In order to fulfil all these goals, aimed towards transforming Mercadona, the company plans to carry out the largest investment in its history, between 1,000 and 1,200 million euros in 2017.
This considerable investment has been decided on by the company’s shareholders (Capital) and the Management Committee, who have further decided to remove the focus from short-term profits in 2017 and 2018: “the company’s capital will not hinder its transformation, and because of this, the net profit for 2017 is reduced to 200 million euros, which constitutes a third of the amount for 2016”, said the company’s President, Juan Roig. “With the objective of setting the bases of the Mercadona of the future, the decision has been taken to sacrifice short-term profits, in order that the actions in which Mercadona is immersed may move along in a swifter, more sustained manner. We are convinced of the great value of this decision, which will derive in the satisfaction of the company’s 5 components in the mid to long term. This is the model of a responsible, solid company all of us who are a part of Mercadona wish for”, Juan Roig has said at a press conference held by the company.
MERCADONA: SOME SIGNIFICANT ACHIEVEMENTS OF 2016
Juan Roig during Mercadona’s press conference 2016.
Juan Roig and the members of Mercadona’s Management Committee during Mercadona’s press conference 2016.