Letter from the President

In recent years, Mercadona has managed to develop numerous projects, on many occasions thanks to making bold decisions, even if unpopular and bothersome, and understanding that the path to achieving success is not always a straight line, instead sometimes having to do tacking.

With this way of thinking and doing things, and with the strategic vision of the Management Committee, supported by the shareholders, benefiting the 5 components (“The Boss”, as we refer to our customers internally, The Employee, The Supplier, Society and Capital), in 2016 Mercadona commenced its brutal transformation, achieving it in the long-term through investment. Seven years later, and with an investment that has exceeded 10,000 million euros, today we can state that the excellent results obtained in the last twelve months are the result of doing everything necessary within the Mercadona Model.

In particular, we commenced the implementation of our New Efficient Store 8 Model, involving the transformation of all our supermarkets to enhance the shopping experience for the “Bosses” with our new fresh food sections and Ready-to-Eat service, which is already available in most stores. We also announced our international project with our arrival in Portugal, where we currently have 49 supermarkets. Meanwhile, we also launched the Mercadona Online Project, which is now making a profit. In addition, we embarked on redesigning and optimising our logistics centres, building new offices in Albalat dels Sorells, in Valencia, and the digital transformation of the company, involving the incorporation of new IT and organisational tools to improve our scientific knowledge of our processes with a view to making them more efficient and productive.

By introducing and implementing all these decisions, our sales have increased to €35,527 million, 15% up on 2022. I would also like to point out that our international project is now on the road to becoming profitable. Furthermore, today our “Bosses” choose us and buy more, after having gained over 200 customers per store per day and having increased our market share by 0.6 points. These results reflect the hard work and commitment of our purchasing and prescription departments, together with our specialist suppliers and intersuppliers, aimed at ensuring that our customers make the right purchases from an efficient selection through our Shopping Trolley Menu with the highest quality products at the most affordable prices on the market.

These changes also translate into better organisation, improved decision-making and more innovation through the participation of all company departments. In this way, we strive to stand out from the competition and stand the test of time through a sustainable approach without losing sight of efficiency, productivity and improved management. All this has contributed to a net profit of €1,009 million, 40% more than in 2022. Of this total profit, 100 million euros can be attributed to the outstanding management performance of our treasury.

“Companies cannot turn their backs on society. We have an obligation to contribute to the creation of wealth and wellbeing so that society recognises the value of having more and better companies"

Of course, such a transformation would not have been possible if we had focused solely on physical resources. The most profound change has been to our mindset. After all, we would never have achieved these remarkable results without the dedication and talent of the 104,000 people who make up Mercadona, 5,000 of whom have joined our project over the last year. Each and every one of them has been the real driving force behind our transformation, the greatest asset of our “Bosses”, and ultimately, the reason for Mercadona’s success. For this reason, as everyone at Mercadona deserves it, the company has shared €600 million of its profits with its employees as performance-related bonuses, 50% more than in 2022.

I firmly believe that Mercadona must operate with the values of shared commitment and purpose, and that our managers and employees set an individual and collective example of leadership, because this is the only way that people excel doing what they know best and feel motivated to do so. Each day, setting an example and our actions are what best define the essence of leadership.

This intention also involves a social commitment because companies cannot turn their backs on society. Therefore, we have an obligation to contribute to the creation of wealth and well-being so that society recognises the value of having more and better companies. Indeed, this is precisely the basis of Mercadona’s motivation to share its profits with society, as reflected in our joint direct and indirect contribution, which amounted to €2,604 million in 2023, 15% more than in 2022. Similarly, Mercadona paid more than €343 million in corporate income tax, a 43% increase compared to the previous year, with a tax rate of 23.3%.

This commitment to having a more positive impact on society extends to our ongoing duty to preserve and protect the environment, as demonstrated by our commitment to saying “yes to continuing to care for the planet”. In this regard, we have maintained our firm commitment to developing policies aimed at reducing emissions, employing recycled material in our commercial packaging and using renewable energy sources.

Seven years after embarking on Mercadona’s brutal transformation, we still have a long way to go. With our Model as our roadmap, we will continue to adapt and tack to build a relationship of mutual trust with our specialist suppliers and intersuppliers, which is essential for successfully achieving our goal of being a Radical Totaler and ensuring that our customers choose us and make the right purchase decisions. I believe that doing what is necessary to make better progress, and with the leadership of each person, manager and employee that make up this great company, we will manage to make things happen.

Mercadona is on a very good path, and 2023 has been nothing short of outstanding in all respects. For this, I would like to thank the Board of Directors and the shareholders for their trust placed in the decisions of the Management Committee. Without their support and dedication, it would not have been possible to commence, develop and continue our brutal transformation, based on the understanding that we needed to focus on the long term through investment, debt-free and with our own equity capital, which today forms the basis of the circle of efficiency, profitability and management in which the company is immersed.