Spanish supermarket group moves into Portugal
Mercadona, the well-known Spanish food retail group, is expanding into Portugal and will open stores in the Porto region and in the north of the country.
Set to compete with second tier supermarkets like Lidl and Intermarché, the move from Spain’s largest supermarket group foresees around 10 stores opening by the end of 2019 in a €160 million investment.
The company’s long-term strategy for Portugal is to open between 150 and 200 stores all over the country if the rollout in the north of Portugal goes well.
Mercadona, owned by entrepreneur Juan Roig, has a 25% share of the food retail market in Spain. The French group Carrefour are in second place in Spain.
The Portuguese food retail market is dominated by Sonae MC (Continente) with 700 stores and Jerónimo Martins (Pingo Doce) which has 450 stores in Portugal.
When delivering its financial results, Sonae MC Chairman Paulo Azevedo downplayed the imminent arrival of the Spanish competition.
“We’re very used to dealing with much bigger supermarket giants from France (Carrefour) and Germany (Lidl and Aldi) in the food retail sector.
“We’d experienced French invasions before and so we’re prepared and very confident because we’ve had lots of experience in these struggles and challenges” he said.
Azevedo added that Mercadona is “a competent operator like the other giants who have challenged us on our territory and we know how to compete against them” he added.
Currently, Continente has a 28% market share in Portugal while Pingo Doce has 26% while for now Mercadona will seek to compete with “second line” competitors in the Portuguese market such as Lidl (10%), Intermarché (9%), Auchan (6%) and Minipreço (5%).