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Juana Roig: “Mercadona Online will account for 5% of future sales”

Date: June 22, 2024 Time: 08:42:49

No one doubts Mercadona’s leadership in the food sector. With a business volume of some 30,000 million euros per year, a third of the total Spanish market, changes in consumer behavior towards digital channels have become a great challenge for a company that is very present in the territory through stores. physical . This challenge was assumed by Juana Roig, daughter of the executive president and largest shareholder, who recently appeared on the Itnig business accelerator podcast to discover the keys to the operation of Mercadona Online, the supermarket of the Valencian online chain.

“When you have a Mercadona behind you it is very easy to sell. 325 million is a lot of money, but if you look at the figures we are 1% of the group’s sales,” he reveals. According to her data, online transactions barely account for 1.7% of the company’s global business, a “very small value for all that is being said.” His objectives are to reach 5% of the group’s sales in the near future. They currently serve between 8,000 and 9,000 orders every day, and they consider that Mercadona Online’s biggest competitor is Mercadona itself.

A ‘startup’ that invoices 300 million a year

The top leader of the subsidiary has been in charge of implementing a business model and online sales with a ‘startup’ methodology that already supports its business figures. Proof of this is the naturalness with which he speaks of his father’s famous phrase with which he labeled the company’s own website as “shit”: “It was to convert or die; or not to be born, rather,” he confesses.

Based on an innovative commitment to logistics, they negotiated the “hives”, department stores that prepare, organize and distribute their customers’ online orders. They are about 10,000 square meters in size and the first one was installed in 2018 in Barcelona. Since then they have expanded to Valencia and Madrid, and since this year, to Alicante and Seville, the latter after an investment of more than 25 million euros.

“Mercadona Online is the sales channel that delivers purchases to customers at home,” he summarizes. Roig has revealed that most of the technology developed by the company is under the management of the Online subsidiary, which in turn is attached to Mercadona Tech, the technology division. With this separation, they managed, for example, to provide services to physical stores, such as the application created by his team to manage stock, to the point of “counting the tomato cans there are”. To this we must add a computer team of more than 800 people dedicated exclusively to establishments.

Roig tells how Mercadona Online has its origins in the fact that “what we had tried to do inside had not worked out for us, so we took it outside, like a spin off, but with the same model as Mercadona”. The chain billed 540 million euros in online sales in 2022, of which 325 correspond to the new system implemented by Mercadona Online. The more than 200 remaining come from the old sales channel, which the person in charge classifies as “telepurchasing”, and which is accessed by customers located in places that do not have hives implanted, depending on their postal code.

Profitability is in large purchases

As confirmed in the interview, this model is not profitable today: “You lose money.” Between buying digitally or in person, it is more profitable for Mercadona to buy in a physical store, confesses Roig, although a change justifies that its average ticket is 140 euros. “The important thing is that the customer stays in Mercadona and that money is not lost through any of the channels,” he says. “In places where there is a lot of online power, we go to an exclusive online model of beehives, where there is little coexistence with physical stores, something that is difficult even if there is little volume,” he alleges, since “for us there is little margin but a lot of trouble “.

“In the big cities we go with the beehive model, but in the smaller cities a beehive cannot be kept at the cost level, so we return to the stores but with the new website.” This transformation has been underway since 2018 and, as confirmed by Roig, it will not be completed until 2025. His other major challenge underway is the automation of these hives: “we have purchased land in Ripollet (Barcelona) but we have to see if the numbers come out “, he confesses.

Faced with the losses of “teleshopping”, the hives are profitable and generate 6 euros per order. In 2022, they processed 2.2 million orders, so the startup’s profits increased to more than 13 million euros, which are added to the parent company’s profits. Asked about the competition that online supermarkets represent, she considers that it is a “different” model: “We do not ship on the same day, we do not go for small purchases, we go for planned purchases.”

That is why he justifies continuing to charge 7.21 euros – the equivalent of 1,200 pesetas – for shipments: “I do not earn if a client asks me every time he wants something, we have a minimum order of 50 euros because there we do cover costs of manpower”. The company is not exempt from the effects of inflation either: “I am changing in case I earn 6 euros, which now with the increase in the CPI I will go to 5, and we are losing some units per cart”.

Successor to Juan Roig?

Asked about a hypothetical succession at the head of Mercadona, and about whether she would like it, Juana Roig confirms that she has not applied: “When that time comes, we will see. Mercadona is a very big challenge”, although she does not rule out that she decides to put Mercadona at the helm. an executive. “We would see the person who is most prepared at that moment,” she says. She has confirmed that Mercadona “will neither be sold nor would it go public, at least as long as the current shareholder continues”, and “it would not be sold for nothing”.

Asked about what it’s like to be “the boss’s daughter”, she assures that it is “a stick that has its good and bad sides, and you can’t take half the stick. You have the label, you know it and that’s it”. She recalls an anecdote from her time at Inditex to exemplify her situation: “I remember when Marta Ortega passed by and everyone was like” look at her, such “”. Roig also shamelessly assumes that “the most relevant thing I have done in my career to be where I am is being the daughter of my parents”, and explains that taking on the challenge of setting up Mercadona Online was “the way to return” to the family business, where I worked for four years as a purchasing manager.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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