Supermarket chains told to merge or die as international players reign in Spain

The country’s supermarkets face being overpowered

LAST UPDATED: 4 Dec, 2015 @ 22:33

Mercadona supermarket in Spain
Mercadona supermarket in Spain

SUPERMARKET chains are being told to merge or die.

With Spain’s grocery market heading the way of Britain’s and France’s, the country’s supermarkets may have to team up or face being overpowered.

Even the Big Five — Mercadona, Dia, Carrefour, Auchan and Eroski — are at risk of being undercut by international chains such as Lidl and Aldi.

If Spain develops in the same way as its European neighbours, sector experts believe € 21 billion of potential annual revenue could become available as smaller chains merge or disappear, with bigger chains such as Aldi and Lidl picking up the slack.

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  1. If if remember correctly Carrefour is also an international chain…

    Aldi and Lidl increasing their market share just by having better prices than the competitors. They achieve this by minimizing costs for staff (goods are stored in their carton, no need to unpack etc), all stores are built identical which reduce building cost, no “customer points programs” (the costs of these programs is added on the price anyway). The profit margin is somewhere between 2-5%.

  2. Dan,
    you have to be joking. All their fruit and veg is stored for so long that when you buy it, you better eat it quick before it rots. You may not have noticed but Tesco is toiletting. Lidl and Aldi by contrast have excellent fruit and veg, good deals on fish and sometimes meat. Though the Lidl in Guadix had a local butcher selling in the store.

    You’ve also not mentioned the absolute bargains that can be had in Lidl and sometimes Aldi with clothing and tools. Tesco has never begun to match their prices or quality.

    Personally I’ve always enjoyed shopping at street markets wherever I’ve lived in Europe. Those who can only rouse themselves to shop once a week are lazy. Fruit and veg are best bought for muse the same day or two at the latest.

    The Saturday market in Guadix was brilliant, especially the charcuturie and cheese van. Pepe and his wife only stocked the best produce. How I miss the Ocana 2 year old cheese and the ‘jamon del horno’ the spit roast chickens stuffed with thyme and citron and all the veg stalls. Always got there first thing before the heat kicked in. Supermarkets are good for cheap basics but when I want quality produce I choose to use the specialists.

  3. If Mercadona does join a larger group, I hope they keep their independence. They pay their staff well and treat them well. That’s a pretty rare thing in Spanish retail – or retail anywhere in the world. Their prices and range is quite good too.

    As for Tesco opening in Spain. I can’t see it happening. Their UK product line wouldn’t do well (Spanish and British tastes are too different) and the market in Spain is too mature, slow growing and competitive to really make it worthwhile tailoring a whole new line of goods to Spanish tastes just to try and grab a small slice of the pie. Their best bet would be partnering with a local group to offer some of their products that would appeal to the Spanish market within their stores as specialties.

  4. T/G,
    totally agree about Mercadona. When we left Spain I made sure I had bought 25K of their No.4 coffee blend in beans, I’m using the last 1/2 K pack right now.

  5. Mercadona – like most Supermarkets in Spain – is good for only a certain amount of products; hence you find yourself doing several shops at Lidl and Mercadona. I would like a supermarket that has quality across the board under one roof!!

    Why managers at Mercadona cannot learn from other supermarkets – such as Tesco – is beyond me. They are always too slow off the mark. I think they have become totally complacent, although they had a major product overhaul about a year and a half ago.