Thanks to the effort and commitment of the 96,000 employees, a very difficult and complex year has been managed successfully
- The company decided not to pass on to clients the rise in costs derived from the increase in the cost of raw materials at source, transport and industrial prices, which have had an impact of 100 million euros on its operating margin, leading to a 6% decrease in net profit, which amounted to 680 million euros in 2021.
- Despite the difficult scenario that it has faced, Mercadona has continued to advance in its brutal transformation with the objective of becoming a more digital and sustainable company, having invested 1.2 billion euros.
- The company has created 1,000 new jobs with a permanent contract and has guaranteed the purchasing power of staff with a wage increase in line with the CPI in Spain and Portugal, and has once again recognised the effort of staff by allocating an objectives bonus of 375 million euros, 25% of the total profit generated.
- In 2021, Juan Roig and Hortensia Herrero have again allocated 100 million euros of their dividends to reactivating the economy of the Valencian Community and Spain, a figure that they will be matched in 2022 “because knowledge and money bring happiness... if you share them”.
Mercadona, a company with physical and online supermarkets , has increased its consolidated sales in constant surface area by 3.3% in 2021, reaching 27.819 billion euros. Of this total, 415 million correspond to sales at its 29 stores in Portugal, a country in which the company has attained a market share of 3%, after being there for two years.
Over the past twelve months, especially since April, the company has faced a complex economic and social context, in which it has had to manage the various measures of the different administrations with regard to the pandemic, such as mobility restrictions and lockdowns; as well as a huge increase in costs derived from the drastic rise in the cost of raw materials, transport and industrial prices.
Faced with this inflationary situation and to minimise its impact on sales prices, Mercadona decided not to pass on all of these significant rises to its customers, which has generated a negative impact of 100 million euros on its operating margins, leading to a 6% reduction in net profit, which amounted to 680 million euros in 2021.
1.2 billion euros in investment and creation of 1,000 new jobs
Mercadona has continued advancing in its brutal transformation to consolidate a more digital, productive and sustainable company model. To do so, it has made new investments to the value of 1.2 billion euros this year, which added to the investment for the three previous financial years exceeds 5 billion in total.
As a result of this investment, the company ended 2021 with 1,662 supermarkets, 29 of which in Portugal, after having opened 79 supermarkets, 9 in Portugal, and closing 58 stores that did not adapt to its new more efficient and sustainable store model. Likewise, it has maintained the renovation process, ending the year with 1,200 Efficient Store Model (Store 8) supermarkets. 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 825 stores.
In addition to generating wealth and activity, its investment commitment has materialised in the creation of a further 1,000 stable and high-quality direct jobs, which has raised the total staff to 96,000 people, 2,500 of which in Portugal.
Likewise, the Management Committee agreed to increase the salaries of all staff in line with the CPI, up 6.5% in Spain and 2.7% in Portugal, with the aim of guaranteeing their purchasing power and in accordance with a company model which has been in force for 28 years, whereby employees are the best asset of the customers and essential for the growth of the Mercadona Project.
The company's commitment to the generation of jobs has also been reflected through different initiatives throughout the year. For example, significant prevention and training work has continued in the field of occupational health throughout 2021, a factor which has become even more prominent in the context of the pandemic, so that staff feel that their health is protected and safe. Along the same line, the 3C (COVID Call Centre) telephone service has been reinforced, which consists of 180 healthcare professionals and doctors, who have offered 24 hour service, 7 days a week, receiving up to 8,000 calls per day at the most complicated moment of the sixth wave, when 5% of the staff were infected.
Another indication of this commitment is the incorporation of new technological applications to facilitate the work-life balance. In this regard, the Activo2 internal mobile application was established in 2021 as one of the main internal communication channels, not only allowing all staff to keep informed, but also to gather their opinions in order to continue consolidating Mercadona as a differential project by incorporating many of the suggestions received through this collaborative tool.
Progress in digital transformation and sustainability
In 2021, Mercadona consolidated its online shopping service (Hives and Teleshopping), and increased its sales to 510 million euros, a figure which represents a 40% increase compared to the previous year. Likewise, Mercadona Online (Hives) has increased its number of orders to 1.8 million compared with 1.2 million in 2020, and has closed the year with a team of 1,636 people. To obtain the confidence of the “Bosses” (customers) who shop through this channel, Mercadona ended the year with three Hives (exclusive warehouses for online sales) located in Barcelona, Madrid and Valencia, and plans to incorporate two new ones in 2022, one in Alicante and another in Seville.
To continue enhancing its sustainability and its “yes to continuing to care for the planet”, Mercadona has invested over 49 million euros in different initiatives and measures aimed at promoting a more positive and sustainable impact on all its actions. In this context, the company has continued to strengthen its Strategy 6.25, which allocates investment of 140 million euros up to 2025 to achieve the triple objective of reducing plastic by 25%, making all packaging recyclable, and recycling all plastic waste; and it has completed the implementation of Store 6.25 throughout the chain, where “The Boss” and employees are informed and trained on waste management.
Likewise, through AENOR, Mercadona has verified the impact of its carbon footprint, after calculating its direct and indirect emissions due to electricity consumption, introducing new sustainable measures for decarbonisation, such as the renewal of the fleet with alternative fuels, the incorporation of solar panels at some of its facilities and changing refrigerant gases in machinery.
Aware of the social impact that COVID-19 is generating, as well as its social and economic consequences, it has increased donations of essential products to soup kitchens, food banks and other charities with which it collaborates by 21%, reaching 20,600 tonnes donated, of which 19,200 have been distributed in Spain and 1,400 in Portugal. Furthermore, to show its solidarity with the island of La Palma, Mercadona has made 74 tonnes of food and 1 million face masks available since the first day of the eruption of the volcano.
Investment of 1.1 billion euros in 2022 and 1,000 new jobs
Mercadona plans to invest 1.1 billion in 2022 to continue promoting its strategic transformation plan. These resources will be used mainly to open 68 new supermarkets, 58 in Spain and 10 in Portugal; to renovate 43 supermarkets to adapt them to the Efficient Store Model (Store 8); and to implement the new Ready-to-Eat section in an additional 150 supermarkets. By doing so, the company will create more than 1,000 stable and high-quality jobs in 2022, between Spain and Portugal.
2022 is proving very difficult, and the inflationary situation is being reflected in the company and will lead to our costs increasing by over 500 million euros. To minimise this impact, Mercadona will continue its commitment to productivity and efficiency in each of its processes in order to be increasingly competitive. An example of this strategy is the removal of the logo from the corporate face mask, an initiative which in itself generates savings of 400,000 euros per year.
Mercadona President, Juan Roig, has stated that “our investment plan continues in 2022. It will surely continue to be a very, very difficult year that we will overcome by applying our Total Quality Model, which is our lighthouse for navigating through this scenario of uncertainty that we are experiencing. I am sure that with the individual and collective effort of the 96,000, we will achieve the goals that we have set”.
Juan Roig and Hortensia Herrero Legacy Project
For another year, Juan Roig and Mercadona's Vice-president, Hortensia Herrero, have reinforced their commitment to society, deciding to reinvest a significant part of the dividends received from their stake in the company and their personal wealth. In total, they both gave 100 million euros in 2021 to different initiatives (Entrepreneurship, Training, Sport, Entertainment, Art and Culture), which has been channelled through the Legacy Project.
This commitment, which began over a decade ago, and which will continue in 2022 with a further 100 million euros of their personal wealth, came about from their shared conviction that “knowledge and money bring happiness… if you share them”. This has been shown 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 holding of the 2021 Press Conference.
Mercadona President Juan Roig following the holding of the 2021 Press Conference.
Juan Roig and members of the Mercadona Management Committee following the holding of the 2021 Press Conference.
Annual Report 2021