Mercadona’s challenges in 2021: accelerate the online strategy and increase its presence in the Basque Country and Portugal

The chain will invest 1,000 million euros between 2020 and 2025 to strengthen and expand its logistics capacity.

Mercadona's challenges in 2021: accelerate the online strategy and increase its presence in the Basque Country and Portugal

Mercadona It continues to be the leader in the Spanish market with a market share of close to 25%, according to Kantar data. Despite the fact that the Covid stole his quota, everything indicates that he will continue to reign for a long time. But that doesn’t mean there are no challenges ahead. In fact, with a view to 2021 Juan Roig has many open fronts.

And we are not referring to its succession, which is also there, but to Mercadona’s business model. To begin with, in 2021 the company will continue with its strategy online at a time when the ecommerce of supermarkets have skyrocketed their sales and it is still another channel to lead.

The company opened, in the midst of a pandemic, his first hive in Madrid, specifically in Getafe. This is added to that of Barcelona and Valencia. Model that will have to be extended to the rest of Spain. It should be noted that this model is not based solely on improving the shopping experience through the new website and mobile application, but also has important changes associated with it.

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By transferring the preparation and dispatch of orders to the hive, instead of managing them one by one from the stores, productivity and efficiency are increased, guaranteeing a better service.

Logistics, in this sense, becomes even more important in its business model. Thus, Mercadona will invest 1,000 million euros between 2020 and 2025 in reinforcing and expanding its logistics capacity. Of the total amount of investment in its logistics plans, the supermarket chain chaired by Juan Roig has already invested 200 million euros this year and another 300 million will be for 2021.

In this way, investments are being prepared for next year in the logistics blocks of Guadix (Granada), San Isidro (Alicante), Parc Sagunt (Valencia) and Seville, among others.

Expansion

For years, the number of Mercadona stores has remained stable at around 1,600. The company it has already peaked in the Iberian Peninsula except in the Basque Country and Portugal. In the Portuguese country, things are progressing little by little and, in principle, with good acceptance by the Portuguese public.

Things are like this: Mercadona Portugal will close the 2020 financial year with a balance of twenty supermarkets, 1,600 employees and more than 300 suppliers. For 2021, the expansion forecasts focus on the opening of between eight and ten supermarkets in the northern districts of Porto, Braga and Aveiro.

It should be remembered that Juan Roig established Irmadona Supermarkets in 2016, with a capital of 200,000 euros and a contribution of 10 million. The investment made between 2016 and 2018 was mainly allocated to the construction of supermarkets, a logistics block located in Póvoa de Varzim (Oporto), its offices in Porto and Lisbon, and a Coinnovation Center in Matosinhos.

As for the Basque Country, the Valencian chain is progressing more slowly. It landed in the Basque Country in 2014 with the opening of a store in Vitoria and currently has 21 stores in the Basque Country and a workforce of 2,045 people. There are two more stores than in 2019.

Furthermore, in September it announced the completion of the construction of its logistics block in the Jundiz industrial estate in Vitoria, a project in which it has invested more than 187 million euros and created 480 jobs.

Ready to eat

Within its strategy is also the ‘Ready to Eat’. Launched in 2019, it was a success in its first year and was implemented in 250 stores. This 2020, the company’s plan intended to be present in 650 establishments of the 1,600 they have, according to company sources.

The 'Ready to eat' from Mercadona in San Sebastián de los Reyes.

The ‘Ready to eat’ from Mercadona in San Sebastián de los Reyes.
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Here the strategy is quite on track. In fact, they have released a new update to the assortment. This incorporates vegetable stew; different types of fish such as salmon, sea bream or cod; sandwiches such as vegetable brioche; the Angus burger or the ham sandwich.

In short, 2021 will be an important year for Mercadona as it is expected to continue developing its strategy online and is consolidated in territories such as Portugal and the Basque Country.