Giants prevail as margins shaved

CRISIS-HIT Spaniards now tend to shop for food under one roof. With 25,000 closures since 2009 the greatest losers are covered-market stalls, independent shops and provincial or regional supermarkets.

Hypermarkets have also felt the pinch but the big winners are the national chains. The food sector has suffered less than others even though family budgets have shrunk.  Precisely because of this, purchases are made in smaller quantities in supermarkets that are close to the homes or workplace, explained Jose Luis Nueno, a professor at the IESE business school.

“Some chains have triumphed by promoting own-label products,” Nueno said, giving Mercadona and Dia as examples. The chains make their biggest savings on improving logistics efficiency and productivity.  This allowed Mercadona to save €725 million in 2012, De la Gandara said.

Profit margins have been shaved to a minimum and the national chains’ 2.4 per cent average is 60 per cent lower than in other EU countries, according to marketing expert Javier de la Gandara.

“Carrefour or Alcampo, for instance, sell their own-label products more cheaply here than in France,” he said.

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