Mercadona has increased its net profit in 2022 by 5% to 718 million euros, and its sales have grown by 11% year-on-year to 31,041 million euros, mainly due to inflation.
This was explained by Mercadona’s president, Juan Roig, during the annual press conference to present the company’s results for 2022, where he stated that a small percentage of the increase in turnover corresponds to real sales and “inflation has taken the rest”. According to him, the company had never before made “such a big jump in sales”.
Specifically, 30,304 million euros of its sales correspond to the business in Spain and the remaining 737 million euros to the business in Portugal, where the evolution of its 39 shops has allowed it to increase its sales by 77%.
Roig explained that Mercadona has “worked hard” to limit the price increase in the shopping basket, although it has not been able to prevent prices from rising “a huge amount” in 2022. Thus, in 2022 Mercadona obtained one of the lowest returns in its historical series. Specifically, he explained that the company has lowered its profitability margin by 0.6 points, which has become €0.025, compared to €0.027 in 2021.
The average increase in its RRP was approximately 10% in 2022 compared to a 12% increase in food prices. The company says it has managed to save more than 375 million euros overall.
Roig has detailed that the company’s expenses have increased to 22.5 billion euros. “We have tried to make a containment dike” in the face of rising costs and “we have had tension with suppliers”, “we have been fighting with them a lot”, he said.
The Mercadona president also detailed that of the 718 million euros of profit, 20% was distributed in dividends (161 million euros) and 557 million euros in reinvestment (80%).
3,000 NEW JOBS
Mercadona has also achieved a market share of 27.6% and has created more than 3,000 new jobs in the last twelve months, 1,000 of them in Portugal and 2,000 in Spain, which has allowed it to close the year with a workforce of 99,000 people, all with permanent contracts.
It has also implemented a wage increase in line with the CPI in each country, specifically 5.7% in Spain and 9.6% in Portugal, where the entry salary in the company has also been increased by an additional 11%.
HISTORIC” TAX CONTRIBUTION
On the other hand, Roig explained that Mercadona has made a “historic” contribution to the public coffers of Spain and Portugal of €2,263 million, 12% more than in 2021. In the breakdown of this contribution, the VAT item stands out, which has grown to 418 million euros, an increase of 26%; or that of the workers’ Income Tax, 443 million euros, an increase of 12%.
In addition, the company has increased its direct contribution by 13%, to 390 million euros; and has paid a total of 240 million euros in corporate income tax, up 22%. Likewise, a pioneer in its policy of sharing the profits generated with its workers, it has shared 405 million euros with its workforce, an 8% increase.
OBJECTIVE FOR 2023: TO LOWER THE RETAIL PRICE
With regard to 2023, Roig explained that Mercadona’s objectives are to lower sales prices – “that is our obsession”-, increase sales, increase the workforce by 1,000 new workers, achieve a net profit similar to that of 2022 and invest 1.1 billion euros to continue promoting its strategic transformation plan, 280 million of which will be in Portugal.
These resources will be allocated mainly to the opening of new supermarkets, the construction, refurbishment and expansion of its logistics blocks to continue strengthening its optimisation, such as in Almeirim (Santarém), where it is building what will be the second logistics block in Portugal and the largest that Mercadona has in the chain. For all of this, the company will create more than 1,000 stable, quality jobs by 2023, between Spain and Portugal.
Juan Roig stated that so far in March “we have lowered the price of more than 157 products and that we are going to continue to pursue cost price reductions, in order to lower the retail prices in the Menu Trolley and so that the total purchase can be made at the lowest possible cost, without affecting quality and guaranteeing the profitability of all the links in the chain”.
