MERCADONA ANNUAL REPORT 2009
TABLE OF CONTENTS
Introduction
Relevant details 2009
'THE BOSS'
Geographical presence: 46 provinces, 15 Autonomous Communities, 4.3 million households trust Mercadona daily.
Local supermarkets: 54 more stores than in 2008, 74 openings, 20 closures.
Market share: 12.8% market share, 12,663,000 m2 total shopping surface area of organized distribution in Spain.
Shopping Cart Menu: Satisfying the grocery needs of our ‘Bosses’ with a Total Shopping cart of the highest quality and with the lowest prices on the market.
10% cheaper in 2009.
1,500 million euros in savings for ‘The Boss’.
THE EMPLOYEE
Stable employment: 62,000 workers, all with permanent contracts.
67% female employees.
500 new permanent positions created.
New Collective Labour Agreement and new Equality Plan:: Signed with representatives from the UGT (General Employees Union), the CCOO (Workers’ Commissions) and the SI (Independent Syndicate). It went into effect on 1 January and will last four years.
Professional development: 793 employees promoted.
Remuneration policy: 200 million euros in performance-related bonuses disbursed among employees.
Training:
25 training courses.
1.4 million hours.
38 million euros’ investment.
609 euros average investment in training per person.
Work and Family-Life Compatibility:
3,927 Working mothers enjoyed a one-month maternity leave extension in 2009. The percentage of working women who decided to become mothers was 9.4%, which was 5% higher than the Spanish average.
In general, uninterrupted morning or afternoon schedules and stores closed on Sundays and holidays.
THE SUPPLIER
More than 100 integrated suppliers ( Hacendado, Bosque Verde, Deliplus and Compy brands).
More than 2,000 Suppliers trade and service Suppliers.
More than 8,500 contributing SMEs.
500 million euros invested by integrated suppliers to distribute their production activities throughout Spain.
More than 1,100 jobs created by the integrated suppliers.
14,200 million euros in purchases from national suppliers, both commercial and service, representing over 90% of the company’s purchases. Equivalent to over 1.4% of the Spanish GDP.
Average payment time to suppliers: 65.
8 active logistics blocks.
4 logistics blocks in planning stage/under construction: Villadangos del Páramo (León), Guadix (Granada), Pla-Za (Zaragoza) and Abrera (Barcelona).
SOCIETY
Social productivity: Commitment to the efficient use of natural resources, contributing to the development of the areas where the company operates.
Contribution to the Spanish GDP: 2,662 million euros.
Joint generation of wealth and employment by Mercadona & integrated suppliers.
Combined investment in 2009, 1,100 million euros.
1,600 new jobs created in 2009.
A combined workforce of 102,000 employees.
Promotion of local commerce: 17 supermarkets in local town markets, 1 new, 6 in progress.
CSR: Spain’s highest-ranked company by the Reputation Institute in New York.
Dialogue and cooperation with the company: active participation in Merchant Associations and Business Federations.
Environmental investment: 23 million euros.
Sustainable transportation: transport more with fewer resources, combined use of truck, train and ship to reduce environmental impact, 384 stores with Silent Night-time Unloading.
Mercadona, along with integrated supplier SCA, was one of the leading examples in sustainability presented at the Climate Change Summit in Copenhagen.
CAPITAL
Trend in sales units (expressed in millions of kilitres). In 2009 we started measuring sales in terms of kilitres (a Mercadona term meaning a combination of kilos, litres, and units sold). We achieved a growth rate of 8%.
2008: 7,400, 2009: 8,000
Trend in productivity, +3% productivity in units sold/person/month.
2008: 12.879, 2009: 13.227
Turnover: +1% in turnover millions of euros.
2008: 15,379, 2009: 15,505
Net profit: -16% of revenue millions of euros.
2008: 320, 2009: 270
EBITDA trend: -13.5% of EBITDA millions of euros.
2008: 838, 2009: 725
Equity capital evolution. A commitment to the long term: Reinvesting profits meant that in 2009 our equity capital figure rose to 1,885 million euros.
2008: 1,641, 2009: 1,885
Sustained investments over time: Over 1,700 million euros invested from 2007 to 2009, an average of nearly 600 million euros a year.
MESSAGE FROM THE PRESIDENT
In my message to you in last year’s Annual Report, I said that we were facing difficult years ahead, years of crisis, and that in order to help our country overcome this crisis, we, as members of society, had to act by earning less, working better and more, lowering prices, etc., so as to continue to create wealth and jobs in our country. That was the challenge we at Mercadona set for ourselves in 2009, to recognize first and foremost that, despite the external crisis, we had an internal crisis at the company that only we were responsible for, since success sows failure and we had fallen asleep.
A prosperous time that had caused us to stray from our business model (the Total Quality Model), was ending. We had to realign Mercadona to this model because we had become distracted from our main activity as a local grocery store: endorsing and recommending top-quality products to our ‘Bosses’ at the lowest price, thereby creating the highest quality and most economical Total Shopping cart on the market.
It was with this mindset that we faced 2009, when the crisis taught us a great lesson, since this new cycle has shown us that we too must change by adapting quickly and by anticipating as much as possible. ‘The Boss’ always has to be at the center of every decision. That is the only path to being able to satisfy all of his needs.
We adopted many decisions: our obligation as a company was to act, to have the courage to implement all of these initiatives and to make the entire Mercadona family believe in them. At the Management Committee we were convinced then, and continue to be, that a mental, and not so much a financial, change was needed. As a result, in order to tackle this situation, we had to lead by example, since change will not come about by itself. It is better to move and be proactive, especially after reaching the conclusion, as was our case, that everything that was happening to us had resulted from our own mistakes.
This mindset led us to make a sudden change of direction, and the entire Mercadona team started to “row in the same direction” with maximum effort. We checked all of our costs and processes, looking for increased productivity and eliminating everything that was not of value to our ‘Bosses’ and that added cost to the process. We passed on the lower raw material prices, we reduced our profits and, to make available an efficient selection of products, we got rid of items that were either duplicated or that were not essential, but rather an invention with a low turnover. All of these decisions were made keeping the best interests of the ‘Bosses’ in mind at all times, the goal being to offer the over 4.3 million households that rely on Mercadona the highest quality and least expensive products on the market: that’s Shopping Cart Menu.
Thanks to the efforts made over these months, we managed to reduce the price of the Shopping Cart Menu by over 10% in 2009. Put another way, assuming an average monthly food budget of 600 euros, we managed to save our ‘Bosses’ over 720 euros a year. This, in turn, has made Mercadona more productive and helped save our country over 1,500 million euros in 2009 as we attempt to reactivate spending.
Achieving these commitments would have been impossible if not for the full dedication of our employees, whose involvement, along with that of our integrated suppliers, has played a vital role in attaining these achievements. We are very proud of this, as we are of having regained, over the course of these past twelve months, the trust of over 100,000 customers a day. We have learned that in this setting, the important things is not to measure ourselves in euros, as we had in the past, but in the kilos, litres and units sold (kilitres). Thanks to this, we managed to sell over 8,000 million kilitres in 2009, which represents an 8% increase (650 kilos and litres more per day in each store). This is what we were working better and more for in this past year, a year that saw hits and misses, both of which helped us to improve.
Turnover in 2009 grew by 1% to 15,505 million euros (8,000 million kilitres), while the net profit remained at 270 million euros, a 16% decrease from 2008. These figures are consistent with the goal we set for ourselves over these twelve months and which included enhancing sales, increasing the number of customers and the volume of kilos and litres sold, while shifting the focus away from the profits. In fact, we remain convinced that we must focus on the long term, which means continuing to work to lower prices through productivity, and not obsessing with increased profits, which must come naturally as the end result of our daily work as grocers by satisfying the needs of ‘The Boss’.
Despite the economic downturn, we managed to retain our entire workforce in 2009 and create over 500 new jobs. We also invested nearly 600 million euros, mainly on constructing and upgrading our logistics blocks and on opening new stores, which totaled 1,264 at the end of the fiscal year. Another important milestone for us was the signing of the new Collective Labour Agreement for the next four years, along with the company’s Equality Plan, signed with the UGT, CC.OO. and Sindicato Independiente unions.
Our goal for 2010 will continue to be to stretch every cent. It is important that those who make up Mercadona work better and more so as continue being more productive. We at Mercadona talk about being price innovators. This implies constant improvement of the processes, knowing the cost of each so as to be able to innovate and offer not only the highest quality products at low prices, but also getting rid of anything that ‘The Boss’ is not willing to pay for and offering him those things that he will pay for.
We face a difficult, difficult, difficult 2010, a year of crisis, with more difficult years to follow. The best way for us to do our part to help our country overcome this situation is by continuing to adapt to it, working better and more, increasing productivity and lowering prices. It is not a question of what others can do for me, but rather of what I can do to solve the problem.
With this conviction, and with a lot of hard work, I am sure that the 62,000 people who make up our company, along with our suppliers and integrated suppliers, will overcome the challenges posed by the current situation, one in which we should all talk more about our duties than about our rights. On their behalf, I thank you for your support, which helps us to remain committed.
Juan Roig
MANAGEMENT COMMITTEE
Juan Roig, President.
Rafael Berrocal, Managing Director of Meat Purchasing.
Julio Bragado, Managing Director of Purchasing: Petroleum Byproducts and Maritime Products.
Francisco Espert, Managing Director International and International Purchasing.
Juan Antonio Germán, Managing Director of External Relations.
Héctor Hernández, Managing Director of Human Resources and Finances.
Alfredo Ibáñez, Managing Director of Administration.
José Ramón Illán, Managing Director of Crop Purchasing, Dairy Products and Byproducts and Logistics.
José Jordá, Managing Director of Stores and Prescription.
Francisco López, Managing Director of Construction and Maintenance.
BOARD OF DIRECTORS
President: Juan Roig Alfonso.
Vice-president: Hortensia Mª Herrero Chacón.
Members: Hortensia Roig Herrero, Amparo Roig Herrero, Juana Roig Herrero, Rafael Gómez Gómez, Fernando Roig Alfonso.
Member-Board Secretary: Carolina Roig Herrero.
Mercadona: Our Model
WHAT IS MERCADONA?
Mercadona is ‘The Boss’, The Employee, The Supplier, Society and Capital.
Mercadona is a Spanish family-owned supermarket company whose objective is to fully satisfy the grocery, home cleaning, hygiene and pet products’ needs of its ‘Bosses’. To this end the company has 1,264 local stores averaging between 1,300 and 1,500 square metres of retail space, representing a market share of 12.8% of the total food store retail space in Spain and contributing to the business dynamics of the areas in which they are located. Every one of these supermarkets has an ample and efficient selection that includes up to 8,000 different items located within easy reach of the over 4.3 million households that place their trust in the company every year.
Mercadona bases its business model on its Always Low Prices (SPB in Spanish) formula, which allows ‘The Boss’ to enjoy a Total Shopping cart and to be able to fill it with products of the highest quality at the lowest prices on the market, in keeping with what has been our company’s motto for over 16 years: “quality doesn’t have to be more expensive”.
Mercadona works with more than 2,000 trade suppliers and service providers, over 100 of which are integrated suppliers, manufacturers of the Hacendado, Bosque Verde, Deliplus and Compy brands, and with whom the company has a long-term mutual cooperation and commitment relationship regulated by way of a Sound Business Practices Framework Agreement and which results in “contracts for life”. They are all committed to the total customer satisfaction philosophy that characterizes our company and are dedicated to both quality services and products. As part of their daily activities, our integrated suppliers rely on the support and services of over 8,500 SMEs all over Spain, all of whom have a visible impact on the creation of wealth and employment in the local economy of the cities and towns where our integrated suppliers manufacture their products.
The company encourages the ongoing training of one of its most valuable assets, its workforce, and has developed a Human Resources policy that focuses fully on the professional fulfillment and personal satisfaction of its over 62,000 employees. Likewise, through its quality department, the Hacendado, Bosque Verde, Deliplus and Compy brands have had ‘The Bosses’ trust for years. All of them have the full backing of the integrated suppliers who, through innovation, guarantee the safety of food and consumption, and who are clearly identified on each product’s package.
TRANSPARENT INFORMATION: Since the development of its Recommended Product model with the Hacendado, Bosque Verde, Deliplus and Compy brands, as well as other items, Mercadona has clearly identified on the label the name of the integrated supplier that manufactures the product.
THE MERCADONA MODEL
Total Quality and SPB (Always Low Prices).
Since 1993, Mercadona’s management model has been one based on Total Quality. Through this method Mercadona satisfies the company’s five components with equal dedication: ‘The Boss’, The Employee, The Supplier, Society and Capital.
In the company’s management, Total Quality is based on the universal premise that “in order to be satisfied, first one must satisfy others”. This commitment has made Mercadona a leader in the distribution sector, with a clearly defined mission: to be “prescribers of the solutions necessary for ‘The Boss’ to do the Total Shopping.
The search for the total satisfaction of what Mercadona considers its most valuable asset, its employees, is relentless. To do this, and with the intent to become the company that best treats its workforce, the Mercadona Human Resources model relies on self-realization, permanent employment, continuous training and striking a balance between employees’ work and family-life compatibility for everyone in the company. This makes it possible for the person who has to satisfy ‘The Boss’ to be satisfied in turn.
The aspect of the Total Quality Model oriented towards the third component of the company, ‘The Supplier’, is summarized as a joint effort towards a common goal: the satisfaction of ‘The Boss’. To achieve this goal, Mercadona establishes close ties with its suppliers based on a stable relationship that often leads to the signing of indefinite agreements and to the creation of synergies that are always to the advantage of those people who rely on the company’s supermarkets for their daily purchases.
Society’s satisfaction is also important to Mercadona. That is why our stores help to modernize urban commerce in those neighbourhoods where they operate. Our supermarkets promote commercial dynamism, generated by the 4.3 million households that place their trust in Mercadona daily. In fact, by focusing exclusively on the sale of food, beverages, cleaning products, personal-hygiene products and pet food, the company foments synergy with nearby commerce through a greater involvement in their development.
As part of its voluntary commitment to promoting initiatives that benefit society, Mercadona is involved in bolstering the Spanish food and agriculture industry through measures which better the social and economic environment of those places where it operates. This makes it a groundbreaking company in the area of corporate social responsibility in the distribution sector in Spain, and one of the most reputable internationally. All in all, it is about following through on what our management model calls for: “satisfying the company’s five components with equal dedication”, while being mindful of all the room for improvement that remains.
Mercadona also satisfies the company’s fifth component: Capital. It does so by satisfying ‘The Boss’, The Employee, The Supplier, and Society, which it achieves through the application of the Total Quality Model. The implementation of this particular management model has been responsible for Mercadona’s positive results since its inception, as well as for its solid and sustained growth, a result of the implementation of objectives and strategies that add value to the company’s five components, the results of which can be appreciated above all in the mid and long term. It is this Model that helps every member of the Mercadona team to make decisions over the course of their daily work activities: “He who has a Model has a treasure”.
TOTAL QUALITY MODEL: Building our relationships on commitments
‘THE BOSS’:
Promoting dialogue and direct communication with our ‘Bosses’.
Maximum quality at the lowest price: Recommended Products.
A return to basics so as to reduce prices with a quality, efficient selection.
Shopping Cart Menu: The highest quality and lowest priced Total Shopping on the market.
Closeness and proximity.
Innovation across the board oriented toward their needs (price, product, technology, environmental, etc.).
THE EMPLOYEE:
Stability, professional development and promotion from within.
Fixed responsibilities. Employees carry out their functions in the same position and changes are avoided; this facilitates employee specialization so that they can do what they know best: satisfy ‘The Boss’.
Work and family-life compatibility.
As a general rule, not opening stores on Sundays.
Permanent dialogue.
Profit sharing.
Necessary and continuous training for the conduct of their job functions.
THE SUPPLIER:
Stability/Contracts for life.
Long-term agreements, communications and transparency in the relationship.
Bolstering productive activity to promote development and wealth.
R&D plus ‘double I’ (Research and Development plus Innovation, supported by Investment).
Reward innovation and process optimization so as to offer the product with the best quality-price ratio (Mercadona Sorolla Innovation Awards).
SOCIETY:
Commitment to the social and economic development of those areas in which we have an established presence.
Social productivity:
Producing more with fewer natural resources.
Sustainable transport.
Strive to “be invisible” in the setting where we carry out our activity.
Permanent dialogue.
Active participation and attentiveness.
CAPITAL
Constant and sustainable growth.
Reinvestment of profits.
Innovation as a factor for competitiveness.
Focusing on the long term.
Increasing productivity through reengineering and process standardization.
TOTAL QUALITY MODEL: Building a reputation by example and with facts-
1993: Implantation of the SPB (Always Low Prices) business strategy, the cornerstone of the Total Quality Model.
1995: Start of the project to make all staff permanent employees.
1996: Birth of Recommended Products and of the Hacendado, Bosque Verde, Deliplus and Compy brands.
1997: Under the principle of “same responsibilities, same salary” Mercadona implants its Remuneration Policy.
1998. Development of the New Model Mercadona - Integrated Suppliers.
1999: 100% of staff are permanent employees.
2000: Inauguration of the first free nursery for employees and implementation of the first performance-based bonus system (employee profit-sharing).
2004: As a general rule, Mercadona decides not to open its supermarkets on Sundays, to help its employees reconcile their work and family lives.
2005: One extra month of maternity leave for working mothers.
2007: Fourth-ranked company in the world in Corporate Reputation according to the New York Reputation Institute.
2008: Realignment of Mercadona with its Total Quality Model, introducing the concept of Shopping Cart Menu.
2009: A return to basics so as to have an efficient selection and do only that which adds value to the five components.
'THE BOSS'
SATISFYING 'THE BOSS'
Through quality, closeness, innovation, efficient selection, dialogue and price.
2009 was a key year for Mercadona. Over the course of these twelve months, and after the decision made in October 2008 to realign the company to its business model, we have gone to great lengths to return to basics and to make available an efficient selection of products in an effort to do only those things that add value to our customers.
The Total Quality Model has regained the role that it had enjoyed at the company since its implantation in 1993. Likewise, the mission of prescribing and recommending top quality products at the lowest price possible to ‘The Boss’, has been a constant feature over these twelve months, where stretching every cent so as to pass the savings on to our customers has become an obsession at Mercadona. Prices can be lowered without affecting quality through process innovation.
Under the motto Lower Cost, Lower Price and Same Quality, in 2009, through its strategy to a “return to basics on the shelves”, Mercadona launched over 600 innovative measures that, as a whole, had translated into savings for its customers of over 500 million euros by the end of the year. This cost cutting, which is a work in progress, was achieved with the support of the company’s integrated suppliers, who are equally convinced of the need to review every process and product in order to optimize them and, as a result, increase their competitiveness by carrying over all of the improvements to our strategy of Shopping Cart Menu: delivering the best-quality shopping cart and the cheapest in the market.
The decisions adopted by Mercadona to eliminate whatever does not add any value to the process and adds to the cost of products also meant the reintroduction of the bulk sale of fruits and vegetables, the addition of a more rational and efficient fish mix (tray and counter), the implementation of the bulk sale of meats, the sale of frozen meats and a return to selling sliced ham. All of these initiatives were in response to the current demands and needs of ‘The Boss’.
Another important measure that contributed to some of the savings achieved in 2009 was arranging products so as to “transport more with fewer resources”. This strategy involved moving the factories and farms of the integrated suppliers closer to the logistics blocks on the one hand, and, on the other, reducing the package size and weight of a wide variety of products.
Realigning with the Mercadona Model also meant a return to basics on the shelves or, put another way, a redefinition of the products in our supermarkets. To that end, over these months the criteria of need and turnover were key to determining which products should comprise the Mercadona selection. As a result, about 1,000 items were discontinued over the course of the year: 400 brand names; 400 Hacendado, Bosque Verde, Deliplus and Compy brand items; and 200 perishables. Other items were also added in line with these criteria.
The adoption of this decision meant rationalizing the company’s selection. But, above all, this initiative has allowed Mercadona to have an efficient selection and to become involved in the process for each product.
This has made it possible, since 2009, to know the cost of every item at every step in the process, from start to finish when the product is bought at the checkout line. This gives us a competitive edge in terms of both streamlining oversight and being able to continue reducing prices.
To the strategies described above of returning to basics on the shelves and having an efficient selection, we must add two more: passing on lower raw material prices to the final product, since a lower price at the start should be evident at the end of the process; and shifting the focus away from profits or, put another way, renouncing a part of the profits and earn less so as to lower prices. As a result of all this, the price of the Shopping Cart Menu dropped by 10% in 2009, which has translated into savings for the ‘Bosses’ of over 1,500 million euros over these past twelve months.
TRANSPARENCY IN THE VALUE CHAIN: ORIGIN-DESTINATION PRICES:
In 2009 the Valencia Association of Consumers and Users (AVACU) did an analysis of various agricultural products: seedless watermelon, grapes, salad tomatoes, juicing oranges and bell peppers.
Conclusions of the AVACU study on the Mercadona Model: No price pressure was noted at any time, is supportive of every agent (from the producer to the final consumer), provides food safety to the product, uses resources to the fullest, is transparent.
RECONNECTING WITH 'THE BOSS'
Putting ‘The Boss’ at the center of every decision is the only sure way to satisfy his needs.
The constant dialogue that Mercadona maintains with its customers had a special place in the strategy adopted by the company last year. Over these months, one of the primary goals was to reconnect with ‘The Boss’. This meant engaging in a significant dialogue with the customer and in a relationship whose premise is based on the principle of closeness.
It was within this context of communication and transparency, of regaining contact with ‘The Boss’, that Mercadona created the Monitor figure in 2009. This decision was made after noticing how, in the closing months of 2008, the company had forgotten to put ‘The Boss’ at the center of every decision, and realizing how observing his changes and listening to his suggestions are essential to maintaining his loyalty.
As a result, over these twelve months more than 250 monitors contributed with their efforts to helping the company get in touch with its customers’ needs once more by getting to know what they want, what they value and what they like or dislike, the goal being to better satisfy their needs and thus to have them trust in Mercadona every day.
A significant effort was also made in 2009 to channel the knowledge gained inward to the rest of the workforce so that they could contribute to adapting the company’s selection by analyzing the suggestions received. Thanks to this, Mercadona enhanced its ability to anticipate its ‘Bosses’ needs over these twelve months, giving us a clear competitive advantage.
The efforts made by the entire staff in 2009 to reconnect with the ‘Bosses’, the constant disposition to listen and the dialogue established allowed Mercadona to close out the fiscal year with an average increase of over 100,000 customers a day throughout the entire chain. This, in turn, translated into greater sales, representing an increase of 3% in receipts/store/day. This improvement was also evident by the volume, which in 2009 stood at an average of 650 kilos/litres (kilitres) sold per store per day, an 8% increase over 2008 and which took the total to 8,000 million kilitres a year.
The advances achieved over these months are driving us to continue working along this line of reconnecting with the customer. Another encouraging factor was the recognition of our efforts on the Stiga Spanish Consumer Satisfaction Index, which ranked Mercadona at the top of its list in the food and distribution sector. This was based, in part, on the positive reviews from customers of the products and services they receive.
At Mercadona, paying close attention to ‘The Boss’ is a priority, since his opinions and suggestions allow the company to quickly and better adapt to his changing needs. Suggestions are received not only at points of sale, but also through the company’s Customer Service Centre. The proposals, received either directly at supermarkets, via e-mail or the freephone number set up by the company for this purpose, are routed to the CSC.
Over the course of 2009, the staff that make up the CSC received a total of over 500,000 inquiries. All of these suggestions, questions and concerns are a key asset to Mercadona since they give a first-hand glimpse into the needs proposed by its customers, thus enabling Mercadona to adapt so as to be the company that can offer the best solutions through an effective selection and a positive shopping experience.
Customer Service Number, 900 500 103
www.mercadona.es
Customer Service Centre (CSC)
In 2009, the CSC staff received a total of 500,000 inquiries and suggestions.
QUALITY, FOOD SAFETY AND NUTRITION
Core values at Mercadona.
In 2009, the priority at Mercadona was to return to basics so as to lower prices while ensuring, as always, food safety and quality products.
Mercadona’s selection consists of a wide variety of products whose fundamental attributes are, in order, food safety and quality. In addition to this, their presence on the shelves is dependent on three other factors, namely, how they or the services they offer fit with our ‘Bosses’ needs, their price, and lastly, the profit they provide to the company and to the supplier.
Ensuring the maximum safety and quality of its selection is more than a goal, it is an obsession at Mercadona. That is why the company has had its own Quality Assurance Model for years, one that is based on the strictest quality standards and which progressed even more in the last twelve months with the definition of the Food Safety Monitoring Plan for 2009. The implementation of this new plan involved a significant effort in monitoring both the processes of suppliers and integrated suppliers, as well as the internal processes.
In this context of safety and quality audits, the over 100 integrated suppliers that the company has, underwent an exhaustive evaluation of their processes in 2009, conducted by Mercadona’s own Quality team. This initiative was also extended to include over 100 suppliers. As a result, the quality processes and systems in over 250 factories were audited in the last twelve months.
At the same time, as an essential requirement of Mercadona’s Food Safety Model, the company’s 100-plus integrated suppliers continued to work toward full compliance with standards in this area, which involved the granting or renewal of the most recognized Food Safety certifications, such as IFS v-5, ISO 22,000 and 9001 and the BRC. Along these same lines, the suppliers of fresh products such as beef, lamb, pork, chicken, milk, fish, oil, fruits, vegetables and eggs were also audited by accredited outside companies so that the quality can be traced back to the farm or lot.
Internal efforts made in the area of Food Safety were also significant in 2009. These twelve months saw the implementation of numerous and varied inspections of the transportation processes, involving a check of over 170 different routes. Also checked were each of the warehouses and stores in the chain, which were not only satisfactorily audited by Health Inspectors, but which revealed the efficiency of the self-monitoring systems in place and which are based on a Hazard Analysis and Critical Control Points (APPCC in Spanish). These serve to verify that the necessary requirements are being met which allow the company to offer greater assurances in its stores in terms of Food Safety, and also allow for the implementation of corrective measures as required by the checks made.
A wide selection of 700 gluten-free products suitable for those with gluten intolerance.
In 2009, Mercadona increased the number of gluten-free products by 150, all of them included in Spain’s Coeliac Disease Association (FACE) food listing for coeliacs.
Close cooperation with FACE.
Since the year 2000, Mercadona has been working jointly with Spain’s Coeliac Disease Association (FACE). Mercadona wishes to acknowledge the appreciation shown by FACE for its efforts and for those of its integrated suppliers to make available a wide selection of gluten-free products. This encourages us to intensify our efforts as we continue to provide value to those who suffer from CD.
The goal of Mercadona’s Nutritional Management System is to be “prescribers of the solutions necessary so that ‘The Boss’ has Healthy Products with the Highest Intrinsic Quality and Safety” at the lowest price possible. The main reference used by Mercadona in this regard is the NAOS strategy (National Nutrition, Physical Activity and Obesity Prevention Strategy), complemented by various initiatives, all bound under the same motto: good nutrition, like quality and safety, “does not have to be more expensive”.
The commitment to transparency that Mercadona has with its ‘Bosses’ is complete, and implies providing them with all the nutritional information relevant to its selection that the company can offer. That is why, in 2009, the company continued to advance in this area with tangible initiatives such as clearly identifying the ingredients in its products, this information being of particular importance to customers who suffer from food intolerance or allergies.
Thanks to the efforts made, more potential allergens were eliminated from both the production processes and from the ingredients. Along parallel lines it is worth noting that product labels, when applicable, clearly identify all allergens, even if present only in trace amounts.
In 2009 Mercadona actively cooperated with various health or Food Safety authorities from the different Autonomous Communities, and also maintained close ties with the Agency for Food Safety (AESAN).
Likewise, we should also note Mercadona’s active presence over these twelve months in the various forums associated with food safety, such as the Food Safety committees of the Spanish Association of Commercial Codification (AECOC) and of the Spanish Association of Distributors, Self-Service Centres and Supermarkets (ASEDAS). Also of note was its participation in the Spanish Society for Food Safety (SESAL) and in the Association for Food Industry Research (AINIA).
ACROSS THE BOARD INNOVATION
Add value to the five components.
To Mercadona, innovation is the source of productivity and efficiency, and as such it permeates the company. This transforms it into a unique element whose advances are only applied if they add value to the company’s five components.
From this angle, the company is committed to R&D plus ‘double I’ as a growth engine and as a tool that allows it to offer the best solutions. To this end, four types of innovation are defined: product, process, concept and technical. All of these innovation types are managed under the auspices of Total Quality and are developed by Mercadona using the direct input provided by its ‘Bosses’ and the support of its integrated suppliers, whose quality departments are staffed by numerous technical experts on the subject.
Having an efficient selection implies relying on innovation and constantly investing on product development. At Mercadona, this development is directly related to satisfying ‘The Boss’ or, put another way, with having the quality and service offered be adequately suited to the needs of its customers.
At Mercadona, innovation is not viewed solely as the addition of new products to its selection. By measuring it based on the value it adds, innovation is, for the company, whatever is suited to the needs of its customers and provides them with solutions, which implies selective initiatives, competitive prices, constantly improving quality and creative marketing.
Innovation, viewed as the constant adaptation to the changing needs of customers, allowed Mercadona in 2009 to reintroduce the sale of fruit in bulk and of sliced ham in its supermarkets, and also to include frozen meats (chicken, veal, pork and lamb) in its selection, something that prior to last year was only done in its stores in the Canary Islands. As for innovation in terms of the launch of new products, we should note, as an example, the introduction of the new Bosque Verde line of footwear cleaning products.
The quality and usefulness of this product was such that in 2009 it earned the National Liderpack Award, in addition to being chosen to represent Spain at the WorldStar Packaging Awards. The award recognizes the innovative and adaptive ability of a mass-consumed product that is technically complex to produce and that demands a perfect integration of product design and engineering.
One of the mechanisms which allows Mercadona to add value to its selection is process innovation, which relies on optimizing resources and reducing costs. For example, in 2009 a considerable effort was made by way of various improvements to palletizing and packaging with new formats and packages or lower weights.
The processes were also enhanced over the course of these twelve months by other innovative initiatives in terms of logistics, such as bringing the factories and logistics blocks closer together, a strategy that, given its success, was also applied to some of the farms.
DISCOVER AND IMPLEMENT ONLY THAT WHICH PROVIDES VALUE TO ‘THE BOSS’, SOME OF THE ACTIONS TAKEN:
Integrated Supplier Conservas Escurís Hacendado brand manufacturer: Include plastic lid and easy-open tab on 1-kg tuna can.
Integrated Supplier Ubesol - Maverick Deliplus brand manufacturer: Include plastic lid on makeup-removing wipes box so they keep longer.
Integrated Supplier Sovena, Hacendado brand manufacturer: Incorporation of dispenser to bottle of extra virgin olive oil.
Integrated Supplier SCA Hygiene Products Deliplus brand manufacturer: New nappies for premature babies.
Integrated Supplier SPB, Bosque Verde brand manufacturer: Thermal sealed wrap on bottle cap.
Integrated Supplier Bynsa, Compy brand manufacturer: Air-tight seal and easy-carry handle for pet food bags.
The third leg of innovation at Mercadona, though no less important, is investment in new technologies. Aware that this pillar is key to the development of the company, important technical advances were made in 2009, such as, for example, the upgrade of the hardware and software at the Data Processing Centre and the investment of three million euros in computerized processes at the new warehouse in Villadongos del Páramo (León).
Over these twelve months, Mercadona also allotted considerable resources, in excess of seven million euros, to upgrading the computer equipment at its supermarkets. The past year also saw the standardized implementation, begun in 2008, of the bioptic scanner which, thanks to its greater reading capacity, allows for faster checkouts. The credit and bank card readers at the checkouts were also upgraded during this period so as to adapt them to the new models that feature a chip, which contributes to improving the security of this payment option.
Any mention of initiatives involving technical innovation must also include the e-billing Portal, which is already used by a significant percentage of suppliers. Also worth noting are the improvements made in Web Accessibility, a project that was launched in 2008 and completed in 2009, and which confirms Mercadona’s commitment to making its website accessible to its ‘Bosses’, regardless of their physical or intellectual condition, of their age or of their need to use adapted technologies. This project also allows customers to add a digital signature to any communication that is sent to the company via this route.
For Mercadona, concept innovation as it applies to its ‘Bosses’ involves incorporating everything that adds value to their shopping experience.
Its most obvious component is Stores by Ambience, launched by the company in 2000 with the goal of providing its customers with more spacious stores with a warmer ambience and a more logical product arrangement.
This initiative, intended to optimize the ‘Bosses’ purchases while making the experience more pleasurable, was carried over into 2009, at the end of which there were a total of 1,184 Stores by Ambience.
Supermarkets 2009:
1,264: 74 openings and 20 closures.
24 stores refurbished.
1,184 Stores by Ambience.
STORES BY AMBIENCE. A MODEL FOR AN ECO-FRIENDLY STORE:
Invest in innovation so as to satisfy the company’s five components.
Approximately 1,500 m2 of retail floor space.
RETAIL AREA:
AUTOMATIC DOORS, to separate the air-conditioned area (retail space) from ambient areas (other offices).
Energy savings.
LIGHT-COLOURED FLOORS AND CEILINGS, give a roomier feel.
LIGHTING, a bright and focused light allows for a better view of the sections and products, lower energy consumption and higher efficiency.
LOWER SHELVES, offer a greater field of view, making for a more comfortable shopping experience.
WIDE AISLES, allow for better and greater customer mobility. The goal is to allow for three carts to occupy the width of the aisle at once.
LOWER CEILINGS, for more efficient air conditioning of the premises. Energy savings.
COLOUR-CODED SECTIONS, depending on the section, the colors vary for easier identification by the customer.
Light gray for perfumes; yellow for dairy; red for meats; green for fruits and vegetables; blue for fish, etc.
PERSONNEL OFFICES: Roomier and more comfortable.
BREAK AREA: Features more services for the staff.
DRESSING ROOMS: With more space and individual lockers.
TRAINING ROOMS.
WAREHOUSE: More and better-arranged space.
PARKING LOT: Convenient parking places with wider lanes.
TRASH: Isolated and locked trash room to respect the urban environment and avoid disturbing the neighbors.
The Employee
EMPLOYEE SATISFACTION
A commitment to stability, training, conciliation, promotion and remuneration.
Mercadona made two commitments as 2009 drew to a close: one, to maintain existing jobs, and two, to create 500 new jobs, bringing the total workforce to 62,000 people, each and every one of them highly committed to the project and to the progress of the company.
In fact, thanks to its high level of commitment and to its daily efforts, Mercadona was able, over the course of these twelve months, to meet its stated goal and to fall back in line with its Total Quality Model, something it achieved while boosting efficiency and productivity.
Internal training and promotion
For Mercadona, the most profitable way to invest is to train its own employees. That is why its Human Resources department devotes a considerable effort to enhancing the skills of its workforce, convinced that the company can only grow through the personal and professional enrichment of its staff. In 2009, this effort was translated into an investment of over 38 million euros, an average of 609 euros per person. Thanks to this, the company’s personnel were able to benefit from over 1.4 million training hours, all given within the normal working schedule.
In order to encourage this growth, Mercadona has been committed for years to ongoing training through specific modules that enhance the respective job skills and abilities of all its employees. Thanks to this, the company can rely on a highly qualified, productive and competitive workforce whose efforts, both individual and combined, are aimed at satisfying ‘The Boss’ by prescribing the best solution to his needs.
Mercadona’s commitment to the professional development of its employees is reflected in their career progressions, since every executive post at Mercadona has been filled through a strategy of promoting from within.
In 2009, this commitment to the training and development of the staff allowed a total of 793 individuals to attain posts of greater responsibility thanks to their professional merit.
62,000 people committed to the Mercadona Project.
Committed to training.
1.4 million training hours.
25 different training initiatives.
38 million euros invested in training.
609 euros per employee on average.
793 employees promoted.
Training modules:
Leadership Training: In 2009, 480 managers at the company improved their skills in this area through the use of case studies in the training module.
Certified License: Over these twelve months, this course was offered to new professional groups within the stores department, the goal being to ensure these employees receive the training required in order to carry out their tasks perfectly once they start their jobs.
Hands-on Training of Managers in Stores: The duration of this training module was extended so as to better prepare them for the task of supervising and managing a supermarket.
Prescription Training: The number of training actions was tripled and new modules added in line with the new sales models and strategies implemented by the company. The implementation of the New Sales Prescription Model and the New Order Model in the Fruits and Vegetables, Meats and Bakery sections was completed, combining classroom training with a new in-store training model.
Computer Training: The workers’ skills in this area were developed. Training modules specifically intended for personnel in project coordination, analysis and design and programming were used, the goal being to update technologies and to synchronize Mercadona’s projects with those of its suppliers.
English Training: Improvements were made to this training module that include personalized plans that allow for the faster and more effective learning of this language.
Mercadona’s pledges:
Committed to stable employment and to the creation of 1,000 new jobs, all of them with a permanent contract, over this period.
To improve the purchasing power of all its staff by guaranteeing the real CPI plus an additional 0.5 to 2.4%, depending on the work group to which each employee belongs.
To continue promoting equality between men and women, by: Creating the post of Equality Agent, who will advise the company in this area, by launching information and sensibility awareness campaigns on the importance of equal responsibility and equal obligations in the distribution of tasks.
NEW COLLECTIVE LABOUR AGREEMENT AND EQUALITY PLAN: In December 2009, Mercadona signed a new Collective Labour Agreement and Equality Plan with representatives from the UGT (General Employees Union), the CCOO (Workers’ Commissions) and the SI (Independent Syndicate). It went into effect on 1 January and will last four years.
Work and family-life compatibility
Balancing the work and family lives of all those who carry out their professional activities at Mercadona is a key component of the Total Quality Model, which for years has recognized the fact that the more efforts are made to improve the quality of life of the workforce, the greater the returns.
That is why, in 2009, specific initiatives were advanced in this area, such as the new work schedule for employees who work reduced hours so they can take care of children under eight, and who now enjoy greater flexibility with 86 different schedule offerings, versus the seven in 2008; or the enlargement of the Standard Workforce (standard annual schedules) which, starting last year, was available to personnel in the Logistics Department.
In 2009, a total of 3,927 employees opted to extend the legally prescribed four-month maternity leave by 30 days, thus taking advantage of an initiative adopted by Mercadona in 2005. Moreover, 9.42% of the company’s female employees decided to become mothers, a figure that is five percentage points higher than the Spanish average and which shows that job stability and compatibility between the family and work lives of the workforce are a reality at Mercadona.
All of these initiatives were in addition to the measures that Mercadona has used for years in an effort to enhance personal and professional compatibility by committing to quality employment so as to dignify the jobs associated with the distribution sector.
Despite these ongoing efforts, the company realizes that much remains to be done in this area if it is to become, as is its goal, the company that best treats its employees so that they will, in turn, want to dedicate their entire professional careers to Mercadona.
WORK AND FAMILY-LIFE COMPATIBILITY
Measures implemented by the company:
Permanent contracts. PROFESSIONAL STABILITY.
Not opening supermarkets on Sundays. HONOURING WORK POSITIONS.
Standard Workforce. HOMOGENEITY OF SCHEDULES AND BETTER PERSONNEL PLANNING.
Nurseries at some logistics blocks. FLEXIBILITY AND PEACE OF MIND.
A fifth month of maternity leave. MORE TIME WITH THEIR BABIES.
Working near home. REDUCING UNNECESSARY COMMUTING TIME.
REMUNERATION POLICY
Equality plan: Same responsibilities, same salary, regardless of gender.
Since 1997, Mercadona’s pay policy has adhered to the Equality Plan: same responsibilities, same salary. But this policy is also rooted in justice and consistency, concepts that allow for the fair compensation of the responsibilities assumed every day by Mercadona’s employees and of their dedication, which has long since turned the company’s human resources into the best in the distribution business.
In addition to the stability that permanent contracts provide to Mercadona’s 62,000 employees, the motivation of the entire workforce is also rewarded with salaries that are above the norm in the industry, as is to be expected of human resources whose productivity and efficiency are also above the norm.
Mercadona also encourages its employees’ efforts through variable remuneration policies, an initiative which allows it to secure individual dedication to collective projects. In 2009, after the goal of realigning the company with its Total Quality Model was achieved, thanks to the special motivation and involvement of the entire workforce, the company decided to allot over 200 million euros for the payment of an incentive bonus. This amount, which is to be paid out in March of 2010, will be distributed among those employees who have been at Mercadona for at least a year and whose dedication allowed not only the company to meet its overall goals, but also for the objectives specific to each post to be attained.
HEALTH AND SAFETY IN THE WORKPLACE
15 million euros invested in prevention.
The health and safety of its workforce is a concern for Mercadona and one of the pillars of its Total Quality Model. That is why an important effort was made in 2009, oriented toward what is, for Mercadona, the best investment in this area: prevention. Over 15 million euros in 2009 were earmarked toward the fundamental factor that is the protection of the health and safety of the company’s employees.
Over the course of these twelve months, Mercadona, as is its norm, used safety and ergonomic criteria to evaluate and standardize every job. It also engaged in a significant training and information-gathering effort. Specifically, and in addition to the general training modules, Mercadona worked to disseminate various specific preventive methods among its employees, such as the Ergonomic Method for Preparing Pallets by Hand at its logistics blocks, its Safety at Heights Method for the employees at its Ciempozuelos and Villadangos del Páramo logistics blocks, and its Load Handling and Forklift and Pallet Jack Operation Method for its supermarket and logistical employees. Likewise, so as to ensure the workplace safety of certain jobs through preventive training, specific courses were taught, such as Emergencies in the Event of a Leak, aimed at Emergency Team personnel and at the Evacuation and Intervention Teams at the logistics blocks, or the course developed for the Cleaning and Construction personnel.
In addition to the constant improvement of workplace conditions, the prevention efforts geared toward production methods were also considerable with the addition of significant upgrades to the machinery and facilities in 2009. Examples of this are the side protection added to all pallet jacks at the logistics blocks, a new automatic depalletizer model installed at the Villadangos del Páramo facility with reduced noise levels, the automation of manual load handling at the logistics blocks, the refurbishment of stores and warehouses to take advantage of ergonomic improvements in freight lifts, lifting platforms, ramps, etc.
In order to safeguard the health of its workforce, Mercadona has a medical team comprised of 74 professionals, including 16 technicians specialized in prevention practices. They have all been proactively involved not only in the development and application of these specific courses and improvements, but also in the prevention of risks during the conduct of daily tasks at the company. This implies keeping up with research in accidents, periodically assessing risks, conducting technical safety inspections of machinery and facilities, constant monitoring of hygiene, periodic medical checkups and monitoring environmentally sensitive employees. Likewise, the efforts of the Prevention Services were instrumental to the implementation of campaigns intended to promote healthy lifestyle choices, such as better diet, exercise or reduced tobacco use.
In carrying out their work in the area of workplace health and safety in 2009, Mercadona’s Prevention Services relied on the help and cooperation provided by its insurers: FREMAP, UMIVALE, ASEPEYO, Mutua de Accidentes de Canarias (MAC), Mutua BALEAR, Mutua de Accidentes de Zaragoza (MAZ), IBERMUTUAMUR and Mutua MONTAÑESA. Efforts were also made over this period to exchange know-how with the Prevention Services of Mercadona’s main suppliers, which is undoubtedly an important facet as the company strives to continue improving in this area.
The Supplier
THE SUPPLIER: A MUTUAL COMMITMENT
A relationship based on stability and innovation to create growth and wealth.
In Mercadona’s Total Quality Model, the figure of the Integrated Supplier plays a key role. The relationship with this partner is based on trust, stability, constant work and joint commitment, and allows both to keep advancing toward a common goal: to satisfy the needs of ‘The Boss’ with an efficient selection that boasts the best quality-price ratio on the market while eliminating whatever does not provide any value.
This role was also key in 2009, when all the joint efforts were focused on a return to basics. This goal was reached, in large part, thanks to the work done by each and every one of the 100-plus integrated suppliers, which are very involved in the Mercadona Project and equally committed to the company’s Mission and values.
The figure of the Integrated Supplier, manufacturers of the Hacendado, Bosque Verde, Deliplus and Compy brands, is firmly entrenched in the company given its contribution to achieving Mercadona’s goals, year in and year out. But this model for an edifying and stable relationship has also been of special significance from a socioeconomic standpoint over this period. In fact, the growth experienced by the integrated suppliers directly translates into the generation of wealth and employment in those communities where they carry out their activities, in addition to having a significant impact on the country’s economic output as a whole.
In 2009, the company’s integrated suppliers invested 500 million euros. But in addition, thanks to their activity, which has continued to filter throughout the entire country, over 1,100 new direct jobs were created, raising their total payrolls to 40,000. On top of this is the indirect activity that was generated in 2009, which involved continued commercial relationships between the integrated suppliers and over 8,500 SMEs, with the accompanying creation of wealth and employment that entails. All of this serves to highlight how Mercadona’s integrated supplier model is one of solidarity with the entire value chain.
Impact of integrated suppliers on the economy in 2009.
500 million euros invested.
1,100 new jobs.
8,500 collaborating SMEs.
Reassurance is essential if providers are to be able to focus on guaranteeing the quality and safety of their products. Such is Mercadona’s understanding, and the reason why it is committed to stable relationships. In order to establish close ties and promote the joint realignment needed to satisfy ‘The Boss’, Mercadona enters into “contracts for life” with its integrated suppliers. This guarantee allows them to plan their growth rationally, thanks to this model of mutual cooperation.
The company is even more committed, if possible, to its produce suppliers. In fact, in exchange for the high safety and quality standards required and which entail strict controls from the time the ground is prepared for planting until the product reaches the consumer, Mercadona guarantees the farmers a stable price for each kilo of fruits and vegetables, which serves to cushion price fluctuations.
This unique way of looking at its relationship with suppliers is based on solidarity and transparency, two values that the Valencia Association of Consumers and Users (AVACU) noted as part of its findings in a study conducted in 2009 on the differences between prices at the origin and destination. This study, which focused on five specific agricultural products (seedless watermelon, grapes, salad tomatoes, juicing oranges and bell peppers), also highlighted the high value placed by the suppliers of these products on their relationship with Mercadona, especially as it relates to contractual incentives and payment methods, which allows them to “plan for a future without significant hindrances”. Another point emphasized in the AVACU report is that “Mercadona, as such, cannot have profit margins that could endanger the suppliers studied”, just like the exhaustive controls required of these suppliers also cannot endanger the safety or quality of their food products.
TRACKING PRODUCTS FROM THEIR ORIGIN AT MERCADONA:
In 2009, Mercadona and its fruit and vegetable suppliers took another step forward toward transparency in the origin of their products by hiring external auditing firm Norma Agrícola, a certification agency specialized in the agricultural sector and accredited by Spain’s national accreditation body, ENAC, to certify the tracking of products from their origin.
The work conducted by this agency confirmed the sustainable and responsible nature of Mercadona’s activity in Spain’s agricultural sector, since 85% of the total volume of produce sold in financial year 2009 by Mercadona originated in Spain, with the remaining 15% being imported solely for reasons of seasonality or unavailability in the domestic market.
Annual Mercadona Integrated Suppliers Meeting
Two meetings of integrated suppliers were held over the past twelve months, one in June and another in January, both in Valencia. The meetings discussed a joint enterprise for combining criteria and efforts for the purpose of realigning Mercadona with its Total Quality Model.
The 12th meeting, held in January 2010, served to cap off the joint efforts made in the previous months between Mercadona and its integrated suppliers. The event featured an analysis and assessment of the initiatives implemented for the sole purpose of doing only that which provides value to ‘The Boss’.
At this Annual Meeting, all the parties involved pledged their commitment to continue striving for across the board innovation so as to add value to the company’s five components. That is why the 2009 Sorolla Innovation Awards were granted to the Mercadona integrated suppliers as a whole, for their exemplary efforts over these months to reduce all costs that do not add any value to the five components and, on the flip side, for incorporating whatever ‘The Boss’ is willing to pay for.
LOGISTICS BLOCKS
A 620,000-square-metre network that supplies 1,264 supermarkets daily.
The efficient and timely resupply of all of Mercadona’s supermarkets, 1,264 at the end of 2009, depends on its 620,000-square-metre logistical network.
As with the company’s other departments, a significant portion of the efforts made in the last year in this area were focused toward reducing the impact of transportation on the price of products or, as Mercadona sees it, on “transporting more for less” and to have an increasingly smaller impact on the environment.
To ensure the efficiency and optimization of the logistical network, the company has committed to investing over 600 million euros in this area in coming years, mainly earmarked for the construction of new facilities and for upgrading and improving existing structures. A clear example of the effort made in 2009 was the ongoing construction at the Villadangos del Páramo logistics block, scheduled to be completed in 2011. The total investment in this block, which will become the company’s ninth, will be 200 million euros. Upon opening, it will provide 400 permanent jobs.
Also in 2009, work started on Mercadona’s tenth logistical facility, located in the town of Guadix, in Granada. It is scheduled to open in 2013 and will represent an investment of 180 million euros. This future intelligent warehouse will also generate 200 permanent jobs and its activity will serve to supply 200 supermarkets in the provinces of Granada, Almeria, Jaen and Murcia.
Both the Villadangos del Páramo and the Guadix logistics blocks will replicate the intelligent warehouse model of the Ciempozuelos (Madrid) facility. This pioneering Mercadona Project is contributing to the creation of decent and desirable jobs through the complete elimination of any manipulation or overexertion on the part of the employee and by contributing to preventing and reducing the risk of occupational accidents while increasing productivity.
Abrera, a 360-million euro investment in what will be the company’s eleventh logistics block. In December 2009, Mercadona signed an agreement with the Abrera (Barcelona) city hall for the construction of a new logistics block. The new facility will have a built-up area of 100,000 m2 constructed on a 200,000 m2 lot
The total investment, once it opens in 2014, will be 360 million euros. Taking part in the construction will be 150 SMEs and 600 workers. It will be able to supply 250 supermarkets.
Logistics Blocks:
620,000 square metres aimed at ensuring the company’s supply chain.
LOGISTICS BLOCK in operation: RIBA-ROJA DEL TÚRIA – Valencia, ANTEQUERA – Málaga, SANT SADURNÍ D’ANOIA - Barcelona, SAN ISIDRO – Alacant, HUÉVAR – Seville, GRANADILLA DE ABONA – Tenerife, CIEMPOZUELOS – Madrid, INGENIO - Gran Canaria
LOGISTICS BLOCK in planning stage/under construction: VILLADANGOS DEL PÁRAMO – León, GUADIX – Granada, ABRERA – Barcelona, PLA-ZA – Zaragoza.
SATELLITE WAREHOUSE: MERCAPALMA - Palma de Mallorca, HOSPITAL DE ÓRBIGO – León.
Society
A TRANSPARENT ATTITUDE
We are committed to the promotion of values such as participation, social productivity, development and a respect for the environment.
Satisfying the company’s fourth component, Society, requires a transparent, open and conversational approach. Only by understanding the centrality of this responsibility to the company, and by knowing how to transmit this to the employees and integrated suppliers, can joint progress be made in this commitment, in which the only goal for success is that of constant improvement.
Thanks to this push for constant advancement and progress in its relationship with Society, Mercadona climbed 18 positions in 2009 to become the ninth company in the world, and Spain’s leader, in terms of corporate reputation, as ranked by New York’s prestigious Reputation Institute.
Total Quality was also reflected in the assessment of the company by the Interbrand Consultancy, whose biannual ranking places Mercadona among Spain’s leading brands in all sectors.
All of these accolades are proof that Society values the decisions made by the company. They also serve to remind Mercadona of the need to stay in close touch with its environment, as it has done to date. In fact, it is only through closeness and empathy that an urban business model based on proximity such as Mercadona’s can be developed. This model strives for sustainable improvement in its impact on the economy through the creation of value and through the generation of wealth and employment.
DEVELOPMENT OF LOCAL COMMERCIAL ENVIRONMENTS
Contributing to developing the area where its supermarkets are located.
Mercadona contributes to Society, and the most direct consequence of its supermarkets’ activity is the invigoration of urban commerce in those neighbourhoods where it is present. Not only does the company believe its presence alongside traditional commercial outlets to be enriching, but it promotes their development and preservation through specific initiatives, the most apparent of which is its presence in town markets.
The facts also vouch for Mercadona’s contribution to Society’s development year after year. In 2009, along with its integrated suppliers, the total investment exceeded 1,100 million euros and saw the combined creation of over 1,600 jobs. To this contribution we must also add those made by the 8,500 SMEs with which the company’s suppliers collaborate.
All of this allows Mercadona to stay true to its ongoing commitment to spread its production activity all over Spain and, along with its integrated suppliers, to develop a competitive and efficient food industry noted for the quality and safety of its products.
Also prominent among the facts and figures for 2009 is the creation of employment that, in both its quantity (500 new jobs bringing the total workforce to 62,000), and its quality (all of them permanent), represent a clear contribution from Mercadona to Society.
Likewise, the company has once again increased its contribution to Spain’s Gross National Product (GNP), which directly influences the development and growth of Society. At the close of 2009, it stood at 2.662 million euros. The combination of this data serves to highlight the contribution of Mercadona and its integrated suppliers to the generation of value, even in an adverse economic context such as today’s, and their commitment to sustainable growth.
Mercadona and its integrated suppliers have a combined workforce of 102,000 employees, and they work with over 11,000 companies and SMEs in Spain.
Impact of activity in 2009.
Spreading of its production activity throughout Spain: construction of over 25 factories and 28 production lines.
1,100 million euros invested.
1,600 new jobs.
COMMITTED TO LIVING IN HARMONY WITH TRADITIONAL MARKETS:
Since 2001, when the first initiative of this type was launched in the Sant Salvador Market in Vilafranca del Penedès (Barcelona), Mercadona’s presence alongside traditional markets has really grown. The company currently has 17 stores located in these settings. In total, we are sharing our dream of going back to traditional trading methods with over 1,000 merchants. As part of this dream, six additional Town Market stores are scheduled to be opened in the medium term.
Mercadona’s Presence in Town Markets:
Sant Salvador Market (Vilafranca del Penedès - Barcelona)
De l’Olivar Market (Palma de Mallorca).
Fort Pienc Market (Barcelona)
Salt Market (Salt - Girona)
Onze de Setembre Market (Barberà del Vallès - Barcelona)
As Travesas Market (Vigo)
La Unió Market (Barcelona)
Santa María de la Cabeza Market (Madrid)
Puente de Vallecas Market (Madrid)
Benidorm Market (Benidorm - Alicante)
Ripollet Market (Ripollet - Barcelona)
San Enrique Market (Madrid)
Castellar Market (Castellar del Vallès - Barcelona)
D’Abrera Market (Abrera - Barcelona)
Sitges Market (Sitges - Barcelona)
Orcasitas Market (Madrid)
Los Filtros Manises Market (Manises - Valencia)
In planning stage:
Cubert de Inca Market (Inca - Balearic Islands)
Montcada Market (Montcada - Valencia)
Fondo Market (Santa Coloma de Gramanet - Barcelona)
Cap Pont Market (Lleida)
Les Roquetes Market (San Pere de Ribes - Barcelona)
Canet de Mar Market (Canet de Mar - Barcelona)
A STRONG COMMITMENT TO SOCIETY
A relationship characterized by responsibility and transparency.
Mercadona’s relationship with Society is characterized by closeness, which is only possible through the constant exercise of responsibility and transparency. This approach means sharing in the concerns of various social groups while at the same time, by means of different outlets and initiatives, explaining in detail the company’s Mission and corporate values.
Proof of this are the various forums in which the company’s executives have participated and which have undoubtedly allowed it to strengthen its ties to Society while progressing even further in the area of corporate social responsibility.
Another clear example is given by the various initiatives carried out by the company to expose its management model to the government institutions, such as the visit by the Minister of Science and Innovation, Cristina Garmendia, to the Ciempozuelos (Madrid) logistics block. Within this context of cooperation with the government institutions, over these twelve months the company was involved in different government-backed projects intended to promote the development of the food sector, with the contribution that entails to the development and growth of Society.
Mercadona has intensified its proximity and dialogue across the entire spectrum of Society to include its continued cooperation with the scientific world through its active participation in various academic and educational institutions. Along these lines, we note the incentive provided to the company in 2009 by the decision of the COTEC Innovation and Technology Managers Club to hold its latest periodic meeting at the Ciempozuelos logistics block.
This represents a vote of confidence to Mercadona’s commitment to R&D plus ‘double I’ as a growth engine for business and, as a result, for Society.
In 2009, Mercadona continued to promote its traditional relationships in the area of education, which have resulted in over 3,000 vocational and university students visiting some of the company’s facilities. These encounters provide an opportunity to highlight the company’s relationship with its five components and, by listening to and sharing in their suggestions and concerns, to continue advancing its best business practices.
Also in 2009, Mercadona reaffirmed its participation in the Business Parliamentarian Program, organized by the Association of Businessmen, and which familiarizes numerous politicians and parliamentarians with the company’s operation so as to best explain to them the challenges facing the industry and Mercadona’s particular take on distribution.
The work for social dialogue through all these initiatives allowed for better coordination of in-house efforts, a necessary endeavor if the creation of conditions that favour the joint development of Mercadona and Society is to continue.
In addition, the daily effort made by the 62,000 people who have turned the Mercadona Project into a responsible reality was recognized in 2009 through the granting of various awards, such as that given to the company in March 2009 by the town hall of Getafe, on the outskirts of Madrid, for its “exemplary” behaviour and for consolidating “a business model that promotes reconciliation and stability”. Yet another accolade was bestowed on Mercadona in 2009 by the Zaragoza city hall Women’s Centre, in this case in recognition of best business practices for the integration of women into the workplace.
As important as these awards are, in that they are public acknowledgments that confirm the Mercadona Total Quality Model as a model for responsible social growth and one that deserves the company’s continued commitment, of particular importance, due to the special significance it has to the company, was the 2009 Prince Felipe Award for Business Excellence that was granted to the president of Mercadona. This award, bestowed upon Juan Roig by the Minister of Industry, Tourism and Commerce in recognition of his professional achievements, especially certifies, through the unanimity of the jury, the entrepreneurial, innovative and pioneering spirit of Mercadona in its application of “best human resources and corporate social responsibilities practices”.
Moreover, the responsibility that goes with having been the first to receive this newly-created award requires that Mercadona keeps working with the same dedication, effort and humility, fully aware that there are still many hurdles to overcome and goals to reach in its relationship with Society.
2009 PRINCE FELIPE AWARDS: During the presentation of these awards, the president of the jury, José Ángel Sánchez Asiaín, profiled Juan Roig as an “example of personal and professional behaviour for other businessmen, and a model for youngsters and entrepreneurs”. He added that this has resulted in “Mercadona being the model company that it is today, innovating and always striving to be competitive”. The president of Mercadona underlined how “the Prince Felipe Awards are an acknowledgment for all those Spanish businessmen who have chosen to be entrepreneurs so as to, along with our company’s employees, contribute to the wellbeing of our society through the creation of wealth and employment”.
COMMUNITY TIES: OUR NEIGHBOURS:
Mercadona’s goal is to maintain a close relationship with its neighbours. For years now, the company has realized that the best way to exist alongside them is to be completely invisible to the setting in which it carries out its activity. Although the efforts made in 2009 along these lines allowed Mercadona to get considerably closer to this goal, the company knows that a great challenge lies ahead and that there is still much to be done in its quest to be invisible.
Examples of the initiatives undertaken in 2009:
Soundproof pallet jacks for moving merchandise.
Rubber tires on the machines that lift the heaviest pallets.
Soundproofing of the sales floor and storage area on all new and refurbished stores.
Air purifiers to reduce the bad odors emanating from rubbish container storage rooms.
Stores closed and moved.
Increased use of Silent Night-time Unloading.
Number of complaints from our neighbours:
2007: 1,008
2008: 713
2009: 418
SOME OF THE INSTITUTIONS WITH WHICH MERCADONA COLLABORATES
Spanish Association of Commercial Codification (AECOC).
Spanish Association of Distributors, Self-service Centres and Supermarkets (ASEDAS).
Spain’s Official Chamber of Commerce in Belgium and Luxembourg.
University of Alicante Family Business Chairship.
San Telmo Food & Agriculture Institute Board of Trustees.
Board of Trustees of the Master’s Degree in Commercial Distribution Business Administration (Ministry of Industry, Tourism and Commerce).
Board of Trustees of the Advanced Training Program for managers of food & agriculture chain businesses (Ministry of the Environment and Rural and Marine Affairs).
EDEM Business School.
Eurocommerce.
European Retail Round Table (ERRT).
Terrasa Superior School of Commerce.
Interalimentario Forum.
COTEC Foundation.
Knowledge and Development Foundation (Fundación CyD).
Mobility Foundation (City of Madrid).
THE ENVIRONMENT
Social Productivity: being environmentally responsible increases competitiveness and aids in cutting costs.
Mercadona’s main environmental commitment is to “produce more with fewer resources”. To this end, it has an Environmental Management System whose goal is to optimize the use of natural resources through process efficiency in every area of the company.
In 2009 the company continued to work to save energy, something that Mercadona considers key for the environment since the energy that is most respectful of the environment and contaminates the least is that which is not used. As part of this effort to reduce unnecessary fuel use, the realignment of the Total Quality Model pursued over these twelve months has contributed to achieving numerous advances that have minimized the impact on the environment. Of particular note are reductions in packaging material, adapting containers to optimize shipping space and bringing the facilities of certain suppliers closer to the logistics blocks.
23 million euros invested in protecting the environment.
Save natural resources through better packaging:
9,600 fewer tons of plastic and cardboard after improving various packaging processes.
3.5% reduction in packaging materials for our products.
Mercadona, an example of sustainability at the Copenhagen Climate Change Summit: Mercadona, thanks to the initiative it launched in 2005 with its cellulose products integrated supplier, SCA, which makes the Bosque Verde brand, was one of the examples of sustainability discussed at the Copenhagen Climate Change Summit. This initiative has, since its implementation, resulted in using 11,000 fewer tons of cardboard and 700 of plastics. It has also reduced CO2 emissions to the atmosphere by 2,400 tons, since the improved storage of these products has eliminated about 16,000 truck deliveries.
SUSTAINABLE TRANSPORT:
Through Sustainable Transport, Mercadona is able to “transport more with fewer resources”.
In 2009, the combined use of trucks, trains and ships, along with initiatives to optimize logistical processes, considerably reduced the environmental impact of merchandise distribution.
ROAD:
384 stores with night-time unloading.
9.4 fewer million kilometres by road.
8,600 fewer tons of CO2.
27 million euros saved in logistical costs due to:
Lower raw material price: diesel.
Optimization of truck capacity and loading.
Fewer kilometres traveled by road.
The intermodal transport logistical project presented by integrated supplier Acotral and carried out with Mercadona and RENFE (Spain’s national rail company) won the 2009 award for Best Business Experiment in keeping with the Petra II Plan, presented by the Ministry of Development through the Department of Land Transport.
RAIL:
558 trains a year.
5 different routes.
271,000 tons transported.
13,500 fewer trucks.
11 million fewer kilometres by road.
16,000 fewer tons of CO2 emissions.
30% increase in tons transported with respect to 2008.
SHIP:
300,000 tons of merchandise transported.
13,600 fewer trucks.
16,100 fewer tons of CO2 emissions.
4% increase with respect to 2008.
Other initiatives:
Silent Night-time Unloading: 384 stores, located in towns in over 37 provinces, already feature Silent Night-time Unloading, a 4% increase over 2008. Thanks to the technological advances made in keeping with AECOC’s recommendations for the Urban Transport of Goods, the company is even more “invisible” to its neighbours.
Advances in the use of natural gas as a fuel: Through the logistical operator Acotral, Mercadona launched the use of two tractor trailers powered by liquefied natural gas (LNG). They were built by Mercedes and Iveco and operate between the port of Tarragona and the logistics block in Sant Sadurní d’Anoia (Barcelona). These trucks, along with the one put into operation by Acotral in 2008, represent a leap forward in sustainable transport given this fuel’s reduced emissions of CO2 and of other pollutants, including noise pollution.
Ecofriendly supermarkets: Mercadona has continued to develop this AENOR-certified project which is helping to minimize the environmental impact of its stores. At the end of 2009, a total of 338 of the company’s supermarkets, a 40% increase over the preceding year, optimized their energy usage by implementing pioneering techniques in the sector in terms of climate control, lighting and building design. As a consequence, over 77 million KwH were saved in 2009, leading to a reduction in indirect CO2 emissions of 22,000 tons.
Sustainable products: All the paper used by the company is FSC certified, and all the cellulose products from the integrated supplier SCA feature the WWF/Adena logo. Both of these certify that they come from sustainable forests. In addition, the Bosque Verde line of cleaning supplies adhere to AISE regulations and include the Sustainability Charter logo on their labels. Our commitment to promoting the development of these types of products illustrates that Mercadona’s pledge to the conservation of our natural resources is real.
Over these twelve months, and following the positive experience with previous efforts to compact toilet paper rolls, this initiative was expanded to other cellulose products, such as paper towels, tissues and napkins.
Mercadona at the Retail Forum: Mercadona has been a member of the Retail Forum since its founding in March 2009. The Retail Forum, a joint project of the European Commission, the European Retail Round Table (ERRT) and Eurocommerce, aims to provide a platform for the discussion of environmental issues, for identifying obstacles and opportunities involving consumption and the sustainable production of goods and services, and for sharing best sustainability practices and initiatives in the distribution sector.
The members of the Retail Forum have voluntarily committed to reducing the environmental impact of supply chain distribution by promoting more sustainable products and providing consumers with better information.
Recycling:
123,600 tons of paper and cardboard.
7,200 tons of plastic.
2,140 tons of wood.
1,050 tons of polystyrene.
61 tons of used batteries collected in stores from July to December for recycling.
14 tons of toner recycled (avoids emitting 47 tons of CO2).
Lower use of natural resources:
115 million litres of water saved in 2009 through the installation of equipment to optimize consumption in cooling systems.
77 million KwH saved after investing in training on responsible on-the-job consumption and implementing improved technologies in the stores. This figure is equivalent to the yearly consumption of a city of 40,000 inhabitants.
113,200 fewer tons of CO2 a year from lower electricity and transport emissions as a consequence of not opening Sundays or holidays.
91 fewer tones of paper (1,600 trees) and 272 fewer tons of CO2 emitted as a consequence of encouraging the use of electronic billing and adopting the use of digital signatures for credit card transactions.
Capital
CORPORATE ACTIVITY
Founded in Tavernes Blanques (Valencia) in 1977, Mercadona’s mission is “The sale of all manner of articles in the grocery sector, with the possible opening of establishments for retail or wholesale selling of said products, the providing of transport services for all kinds of goods, and carrying out studies, programs, reports and any other activities which are directly or indirectly related to computers and the management, accounting, administration and oversight of businesses”. Mercadona is dedicated to the distribution of food, pharmacy and perfume products through its 1,264 supermarkets supplied by a series of logistics blocks which the company has strategically located throughout the country.
COMPANY TRENDS
For Mercadona, 2009 was a year that saw great efforts toward the continuing realignment with its management model based on Total Quality. The results achieved over these twelve months were made possible thanks to the trust of over 4.3 million households, the efforts of the 62,000 employees, the commitment of 2,000 suppliers (1,000 service providers and 1,000 sales representatives), and the over 100 integrated suppliers that manufacture the Hacendado, Bosque Verde, Deliplus and Compy brands, and thanks to society’s positive reaction to our activities.
Their involvement and commitment to the management model allowed the company to continue to advance in the development of mid- and long-term efforts designed to find solutions to satisfy with equal dedication the needs of the company’s five components.
The company continued to revise all of its processes so as to adapt to the needs and demands of the ‘Bosses’, the clear objective being, by recommending products, to offer customers the highest quality products and the market’s most economical prices: The Shopping Cart Menu.
In the past fiscal year, Mercadona continued to reduce Days Payable Outstanding, going from an average of 66 days in 2008 to 65 days in 2009.
As in previous years, the company’s annual accounts were audited by Deloitte, S.L., which on 29 January 2010 issued its report without qualification, as usual. Said report, along with the annual accounts, is duly deposited in Valencia’s Mercantile Registry.
SALES UNITS (KILITRES)
In 2009, as a consequence of the significant effort made to lower prices, it was decided, for the sake of consistency, to measure company trends in terms of kilos and litres (kilitres) sold.
At the end of financial year 2009, the company reported a figure of 8 million kilitres sold, an 8% increase over the 7,400 sold in 2008. The company is satisfied with that figure, as it proves how customers bought more over the past twelve months.
SALES
As in previous years, the Total Quality management model and a development policy based on organic growth allowed Mercadona in 2009 to generate a turnover of 15,505 million euros, a 1% increase over 2008.
INCOME
Income before tax stood at 360 million euros in 2009, as compared to 444 million the previous year, which represents a 19% drop. Meanwhile, income after tax in 2009 came in at 270 million euros, 16% down from 2008, a year in which Mercadona posted net results of 320 million euros.
These figures reinforce the message of the company’s Management Committee, which underscores that our top priority must be to respond to society’s demand for companies to assume their responsibilities in reactivating consumption, and that profit figures must take a back seat to this effort.
EBITDA
Mercadona’s capacity to produce revenue was in line with the remainder of its business figures, with the company’s EBITDA standing at the end of 2009 at 725 million euros, versus the 838 million euros posted in 2008.
CAPEX
As of 31 December 2009, Mercadona had a total of 1,264 supermarkets located in 46 provinces and 15 Autonomous Communities, continuing to expand throughout the country through its “oil stain” strategy.
Over these twelve months Mercadona made investments totaling 513 million euros, earmarked primarily for the construction of 74 new stores and the refurbishment of 24 supermarkets to upgrade them to the chain’s comfort standards. The new packaging warehouses in Mallorca and San Isidro (Alicante) were also opened, as were some of the facilities at the Villadangos del Páramo (León) logistics block. To the above figure we must add the investments in financial assets and those intended for the purchase of land for future logistics blocks, which raises the total investments made over these twelve months to 573 million euros.
EQUITY CAPITAL
The capitalization of almost all profits obtained meant that, at the end of 2009, the company’s equity capital figure rose to 1.885 million euros.
Worthy of note is the constant progression in the ratio of equity capital relative to total assets, which went from 38% in 2008 to 41% in 2009.
PRODUCTIVITY
By changing the criterion used to evaluate the company’s progress, now based on total units sold (kilitres), for the sake of consistency, the same criterion was used to measure the productivity of the workforce. In 2009, the number of units sold per person rose by 3%, going from 12,879 kilitres a month in 2008 to 13,227 kilitres a month in 2009.
This figure highlights the commitment of everyone involved in the Mercadona Project to achieve the goals set by the company.
MERCADONA, S.A
Balance Sheet as of December 31, 2009 (thousands of euros)
ASSETS
A) NON CURRENT ASSETS, 2,519,145
I. Intangible assets, 69,032
1. Concessions, 40,287
2. Computer software, 12,277
3. Other intangible fixed assets, 16,468
II. Tangible fixed assets, 2,369,514
1. Land and structures, 1,345,217
2. Technical facilities & Other tangible fixed assets, 931,567
3. Advances and construction in progress, 92,730
III. Long-term investments, 68,603
1. Equity instruments, 27,822
2. Long-term deposits, 30,069
3. Other financial assets, 10,712
IV. Deferred tax assets, 11,996
B) CURRENT ASSETS, 2,040,005
I. Inventories, 540,868
II. Trade and other receivables, 68,244
III. Current financial assets, 1,554
IV. Short-term accrual accounts, 8,440
V. Cash and cash equivalents, 1,420,899
1. Cash, 1,230,899
2. Cash equivalents, 190,000
TOTAL ASSETS, 4,559,150
LIABILITIES AND SHAREHOLDERS’ EQUITY
A) SHAREHOLDERS’ EQUITY, 1,885,041
A-1) Equity
I. Authorized capital, 15,921
II. Share premium, 1,736
III. Reserves, 1,602,008
1. Legal & Statutory, 3,184
2. Other reserves, 1,598,824
IV. Treasury shares, (6,968)
V. Income for the year, 270,268
A-2) Fair value changes, 974
A-3) Subvention, donations & bequest, 1,102
B) NON-CURRENT LIABILITIES, 127,872
I. Long-term provisions, 15,099
II. Long-term payables, 21,698
1. Payable to credit institutions, 10,303
2. Other financial payables, 11,395
III. Deferred tax liabilities, 91,075
C) CURRENT LIABILITIES, 2,546,237
I. Short-term payable to credit institutions, 2,426
II. Trade and other payables, 2,543,811
1. Trade accounts payables, 1,949,407
2. Group companies, trade accounts payables, 5,862
3. Creditors, 262,025
4. Staff, 161,563
5. Other liabilities with Public Institutions, 164,954
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY, 4,559,150
MERCADONA, S.A
Profit and Loss Statement for the period ending on 31 December 2009 (thousands of euros)
A) CONTINUING OPERATIONS
1. Revenue, 14,402,371
Net sales, 14,402,371
2. Procurements, (10,955,258)
Merchandise purchases and procurements, (10,955,258)
3. Other operating revenues, 26,196
Non-core and other current operating revenues, 19,840
Subsidies transferred to income for the year, 6,356
4. Personnel expenses, (1,808,030)
Wages, salaries and similar expenses, (1,397,560)
Employee welfare expenses, (410,470)
5. Other operating expenses, (941,364)
Outside services, (913,942)
Taxes other than income tax, (20,785)
Impairment losses & variation in operating allowances, (173)
Other operating expenses, (6,464)
6. Amortization expense, (348,609)
7. Registered non-financial asset subsidies and others, 864
8. Impairment and net reult from non-current assets disposals, (6,530)
Impairment and losses , (6,545)
Net result on non-current asset disposals, 15
A.1) OPERATING INCOME, 369,640
9. Financial income, 22,446
Income from equity investments in other companies, 551
Income from equity and other long-term investments in other companies, 21,895
10. Financial costs, (25,269)
Third parties, (25,269)
11. Impairment and net result from financial instrument disposals, (6,285)
Impairment and losses , (6,906)
Net result on financial instrument disposals, 621
A.2) FINANCIAL INCOME, (9,108)
A.3) INCOME BEFORE TAXES, 360,532
12. Corporate income tax, (90,264)
A.4) INCOME FOR THE YEAR, 270,268
History of the Mercadona Project 1977 - 2009
HISTORY OF THE MERCADONA PROJECT 1977-1991
1977: The matrimony formed by Mr. Francisco Roig Ballester (1912-2003) and Mrs. Trinidad Alfonso Mocholi (1911-2006) initiate Mercadona’s activity within the Cárnicas Roig Group.
What were then family-run butcher shops become grocery stores.
1981: Juan Roig and his wife, along with siblings Fernando, Trinidad and Amparo, buy Mercadona from their father. The business has 8 stores and approximately 300 square metres of shopping area.
Juan Roig assumes control of the company, which initiates its activity as an independent business.
1982: First company in Spain to use scanners to read bar codes at point of sale.
1986: Introduction of the free Customer Credit Card for ‘The Boss’.
1988: Inauguration of the Riba-roja de Túria (Valencia) logistics block, a breakthrough in Spain for its total automation.
Acquisition of Superette Supermarkets which featured 22 stores in Valencia.
1989: Acquisition of Cesta Distribución y Desarrollo de Centros Comerciales, which allowed the company to establish a presence in Madrid.
1990: Juan Roig and Hortensia Mª Herrero become the company’s majority shareholders.
1991: Acquisition of Dinos and Super Aguilar.
Electronic Data Interchange (EDI) is initiated with suppliers.
1992: The company reaches figures of 10,000 employees and 150 stores.
1993: Introduction of the Always Low Prices (SPB) commercial strategy, which will later evolves into the Total Quality Model.
1996: The birth of the Hacendado, Bosque Verde, Deliplus and Compy brands.
Opening of supermarket number 200, in Segorbe (Castellón).
The first labor agreement is signed for all employees.
1997: Alliance signed with Gómez Serrano stores, Antequera (Málaga).
1998: Acquisition of Paquer stores and Vilaró supermarkets in Catalonia.
1999: The process of making all staff permanent employees (a process started in 1995) is completed; at that time, the number of employees was 16,285.
Inauguration of the logistics block in Antequera (Málaga)
The project for a new design and model for the cosmetics section is initiated.
2000: Construction of the logistics block at Sant Sadurní d’Anoia (Barcelona).
Inauguration in Massanassa (Valencia) of the first Store by Ambience.
Celebration of the first Meeting with Integrated Suppliers.
Signing of collective labour agreement (2001-2005).
2001: Inauguration of the first free nursery for the children of employees at the logistics block in Sant Sadurní d’Anoia (Barcelona).
Mercadona reaches 500 stores when it opens its first supermarket in Linares (Jaén).
2003: First business to carry out an Ethical Audit.
First store without a meat display in Alcañiz (Teruel).
Inauguration of the logistics block in San Isidro (Alicante) and the company’s second nursery.
Launch of the new Hortensia H. perfume line.
Opening of a supermarket in the l’Olivar Market, Palma de Mallorca.
2004: Opening of the logistics block in Huévar (Sevilla) and the company’s third nursery.
The Management Committee decides not to open supermarkets on Sundays, except on special occasions. All stores in the peninsula and in the Balearic Islands without meat counters.
2005: Introduction of the new Mercadona uniform.
First edition of Mercadona Sorolla Innovation Awards.
Opening of the logistics block in Granadilla de Abona (Tenerife).
Signing of the new collective labour agreement for the next four years (2006-2009).
2006: The company’s 25th anniversary.
Opening of the company’s 1000th store in Calp (Alicante).
Relaunching of the Mercadona store card with a new image.
2007: Start-up of the first phase of the 21st Century Warehouse logistics block in Ciempozuelos (Madrid).
The company reaches the figure of 60,000 employees, all of them with permanent contracts.
Ranked fourth in the world in corporate reputation, according to a study by the prestigious New York Reputation Institute.
2008: Realignment of Mercadona with its Total Quality Model fifteen years after its implementation.
Shopping Cart Menu to offer ‘Bosses’ the highest quality and most economical shopping experience on the market.
Inauguration of the Ingenio logistics block (Gran Canaria Island).
2009: Return to basics to ensure an efficient selection, doing only what offers value to ‘The Boss’.
Signing of new Collective Labour Agreement and of Equality Plan (2010-2013).
The Mercadona Project continues to move forward.
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