Spanish retailer Mercadona saw turnover grow by 6% to €22.9 billion last year, with like-for-like sales also rising by 6%.
Net profit decreased by 49% compared to the previous year, falling to €322 million, however, the retailer says that this was a result of record investment during 2017.
The company invested over €1 billion in its store network last year, opening 29 new stores, refurbishing an existing 126 supermarkets, introducing 300 new products, and creating 5,000 new jobs.
Mercadona also began its expansion into Portugal, opening a new co-innovation centre in Matosinhos, and beginning construction on a logistics centre in Porto, which will allow the retailer to open its first four supermarkets in the Greater Porto area during 2019.
Juan Roig, president of Mercadona, said that 2017 was a "turning point" for the company.
"We have our sights set on the long-term, and in line with this, we are committed to the consolidation of a disruptive transformation project that places people’s effort right at the centre," he said.
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Looking ahead, Mercadona says that it plans to increase investment further in 2018, investing over €1.5 billion to open 27 new supermarkets and refurbish more than 200, while expanding its logistics capabilities.
Roig said that the company plans to invest more than €8.5 million between 2018 and 2023.
“If you focus on short-term profits, it is hard to make decisions, and we are currently firmly committed towards investing to transform Mercadona," he added.
Mercadona is currently the largest grocery retailer in Spain, with 24.1% market share, according to the latest figures from Kantar Worldpanel.
Last month, ratings agency Moody's said that Mercadona's improving performance is threatening other retailers in the country, such as DIA and Carrefour, causing them to cut prices to bolster their competitive position, and eroding profit margins.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.
