Mercadona: the business model every entrepreneur should know.

𝘈𝘳𝘵𝘪𝘤𝘭𝘦 𝘣𝘺: 𝘔𝘢𝘳𝘪𝘰 𝘎𝘢𝘴𝘣𝘢𝘳𝘳𝘪𝘯𝘰, 𝘸𝘩𝘰 𝘩𝘰𝘭𝘥𝘴 𝘢 𝘥𝘦𝘨𝘳𝘦𝘦 𝘪𝘯 𝘔𝘢𝘵𝘩𝘦𝘮𝘢𝘵𝘪𝘤𝘴 𝘢𝘯𝘥 𝘩𝘢𝘴 𝘨𝘢𝘪𝘯𝘦𝘥 𝘦𝘹𝘵𝘦𝘯𝘴𝘪𝘷𝘦 𝘦𝘹𝘱𝘦𝘳𝘪𝘦𝘯𝘤𝘦 𝘪𝘯 𝘭𝘢𝘳𝘨𝘦-𝘴𝘤𝘢𝘭𝘦 𝘳𝘦𝘵𝘢𝘪𝘭. 𝘏𝘦 𝘸𝘢𝘴 𝘊𝘌𝘖 𝘰𝘧 𝘜𝘯𝘦𝘴 𝘚𝘶𝘱𝘦𝘳𝘮𝘦𝘳𝘤𝘢𝘵𝘪 𝘧𝘳𝘰𝘮 𝟤𝟢𝟢𝟨 𝘢𝘯𝘥 𝘰𝘧 𝘋𝘦𝘤𝘰 𝘐𝘵𝘢𝘭𝘪𝘢 𝘧𝘳𝘰𝘮 𝟤𝟢𝟤𝟣 𝘵𝘰 𝟤𝟢𝟤𝟨 – 𝘎𝘪𝘢𝘯𝘭𝘶𝘤𝘢 𝘋𝘪 𝘝𝘦𝘯𝘢𝘯𝘻𝘰, 𝘚𝘦𝘯𝘪𝘰𝘳 𝘈𝘥𝘷𝘪𝘴𝘰𝘳 𝘢𝘵 𝘌𝘤𝘤𝘦𝘭𝘭𝘦𝘯𝘻𝘦 𝘥'𝘐𝘮𝘱𝘳𝘦𝘴𝘢 – 𝘓𝘶𝘤𝘳𝘦𝘻𝘪𝘢 𝘚𝘤𝘰𝘱𝘦𝘭𝘭𝘪𝘵𝘪, 𝘊𝘖𝘖 𝘢𝘵 𝘌𝘤𝘤𝘦𝘭𝘭𝘦𝘯𝘻𝘦 𝘥'𝘐𝘮𝘱𝘳𝘦𝘴𝘢.

Mercadona is now Spain’s leading large-scale retail chain and one of Europe’s most interesting business cases. With revenue of €41.9 billion in 2025, net profit of €1.73 billion, up 25% from the previous year, and more than 115,000 employees, the company led by Juan Roig continues to grow steadily in a sector traditionally characterised by very narrow margins. But the figures tell only part of the story. The real reason Mercadona represents a valuable case study is its management model. Year after year, this model continues to improve productivity, margins and customer loyalty, demonstrating that lasting competitive advantage depends far more on organisational quality than on simple growth in scale. For an entrepreneur, this is probably the most important lesson.

The growth strategy is not based solely on new store openings

Many companies measure success by the number of new stores they open. Mercadona, by contrast, has always followed a different logic. Its growth has been gradual and disciplined: it took years to reach Madrid and, after exceeding 1,700 supermarkets, the company chose to focus on improving its existing network rather than continuing to open new stores.

This philosophy remains one of the pillars of its model. In 2025, the company invested approximately €1 billion, allocating most of its resources not to expanding the network, but to strengthening its operating system. Investments focused on modernising supermarkets, digitising processes, developing new logistics centres, strengthening e-commerce and introducing advanced automation and profitability-analysis systems.

The goal is not simply to grow in size, but to increase efficiency, productivity and the ability to create value over the long term. The results confirm the effectiveness of this strategy: over the past five years, the number of stores has remained virtually unchanged, while sales have increased by approximately 50%.

This is a concrete example of how the most sustainable form of growth does not necessarily depend on expanding a retail network, but on the ability to make every store increasingly productive.

The true competitive advantage: a model built around the customer

Mercadona’s success stems from an extremely clear position in consumers’ minds. An episode that took place in Valencia in 2005 summarises it effectively. A customer was asked why he shopped at Mercadona rather than Lidl or Carrefour. His answer was immediate: «Lidl is affordable, but it does not have the range. Carrefour has the range, but it is not affordable.»

That sentence contained Mercadona’s entire strategy: to be perceived as the retailer that offers both affordability and product range, eliminating the compromise customers saw in the alternatives.

At Mercadona, the customer is called “The Boss”, because every business decision begins with the customer’s needs. The brand’s positioning is therefore the natural consequence of an organisation built around the consumer.

This principle is applied through the Total Quality Model, the system Mercadona uses to govern its development. The idea is simple: a company creates long-term value only when it succeeds in satisfying all its stakeholders in a balanced way: customers, employees, suppliers, society and shareholders.

Prioritising the interests of only one group may generate short-term results, but it is unlikely to build a competitive advantage that will last.

Customer loyalty does not come from promotions

According to NielsenIQ, Mercadona is the supermarket chain with the highest level of customer loyalty in Europe. The analysis, published by the Spanish website FoodRetail and based on the share of total grocery spending made at each retailer, assigns Mercadona a 37% share, ahead of E.Leclerc at 32.5%, Tesco at 29.2%, Carrefour at 28.9%, Intermarché at 27.7% and Esselunga at 27%.

Mercadona’s strength does not come from constant promotions, but from a model built with great consistency: stable quality, competitive prices, an essential product range and a high level of trust in the brand.

The objective is not to sell more products, but to become the reference supermarket for families’ daily shopping, gradually increasing the share of spending each customer chooses to entrust to the retailer.

This approach is reflected in the “Siempre Precios Bajos” strategy, or SPB: competitive prices throughout the year instead of continuous promotional campaigns. The goal is not to push customers to buy during special offers, but to build a lasting relationship of trust by eliminating price uncertainty.

Fewer products, greater efficiency

One of the distinctive elements of the Mercadona model is its product range. The company offers approximately 8,000 product lines, far fewer than traditional large hypermarkets. The logic is not to offer everything, but to offer what customers truly need.

This selection makes it possible to:

increase product turnover;

simplify logistics;

reduce waste;

improve stock management;

increase productivity per square metre.

This philosophy is very different from the one that characterised large-scale retail for many years, when a broad product range was considered synonymous with competitiveness.

Affordability must be perceived

Mercadona does not merely offer affordable prices: it works meticulously to ensure that customers perceive this affordability at every moment.

For this reason, it adopts several very precise choices:

it places the lowest-priced products at eye level;

it offers a very large number of products priced below €1 or €2;

it prioritises smaller packaging sizes in order to keep the purchase price low;

it does not offer a premium range, thereby avoiding an increase in the average shopping basket value.

At Mercadona, affordability is not merely a pricing policy, but an experience the customer perceives in every choice made by the retailer. This consistency strengthens the brand’s positioning and builds consumer trust.

Investing in people generates returns

Another distinctive element of the Mercadona model concerns human resources management. The company considers people a strategic investment rather than a simple operating cost.

In 2025, it hired 5,000 new employees, increased salaries by 2.9% in Spain and 2.2% in Portugal, and distributed €780 million in performance bonuses to employees, 14% more than the previous year.

Juan Roig summarises this philosophy in a simple sentence: «The better people are treated, the better the results.»

This vision demonstrates how investing in human capital can translate into higher productivity, better service quality and greater long-term profitability.

Private label as a strategic lever

Private label is one of the pillars of the Mercadona model, but its true competitive advantage lies in the supply chain that supports it.

For the company, the retailer’s own brand is not simply an alternative to major brands, but a tool for differentiation based on quality. For this reason, it works with a selected network of interproveedores, industrial partners involved not only in production, but also in product development, innovation and continuous improvement.

This model ensures a high level of quality control and creates a competitive advantage that is difficult to replicate.

Continuous, not occasional, innovation

For Mercadona, innovation does not mean chasing trends, but continuously improving what creates value for the customer.

In 2025, the company introduced more than 400 new products and improved approximately 220 existing product lines. But innovation does not simply mean adding new items: Mercadona constantly updates its product range, removing products that no longer meet customer needs and refining existing ones.

This approach reduces the risk of launching products that are destined to fail and demonstrates how innovation often means simplifying before expanding.

Digitalisation as a productivity tool

Mercadona does not regard digital transformation as a technology project, but as a tool for increasing efficiency and the quality of decision-making.

In 2025, Mercadona invested €95 million in digital transformation, developing systems capable of improving the efficiency of the entire organisation.

The investments covered stock management, predictive maintenance of facilities, product-range planning and logistics control, as well as advanced tools for analysing the profitability of every product and every store.

Digitalisation also involved human resources management, the strengthening of e-commerce and customer support services, with the aim of making processes faster, more precise and more data-driven.

Every decision is increasingly supported by data. The goal is not to automate in order to reduce human work, but to enable people to make better decisions.

The challenges of a successful model

Like every successful model, Mercadona also has certain areas of vulnerability.

The company continues to depend heavily on the Spanish market, which still accounts for almost all its revenue, despite the gradual consolidation of its presence in Portugal.

This is compounded by limited international expansion, which makes it less diversified than other major European operators.

In e-commerce, Mercadona also began its transformation later than some global competitors, although it has rapidly recovered ground in recent years.

Finally, like the entire large-scale retail sector, it must deal with volatility in raw material and logistics costs, as well as growing competitive pressure from discount chains that are becoming increasingly aggressive on price.

The lesson for entrepreneurs

Mercadona demonstrates that competitive advantage is not the result of a single insight, but of the ability to build an organisation in which strategy, innovation, people, suppliers and processes operate consistently toward a common goal.

Many companies seek growth by increasing the number of customers or accelerating expansion. Mercadona followed a different path: first it built an efficient organisational model capable of generating value, and then it supported growth on solid foundations.

Its success does not come simply from competitive prices, but from its ability to eliminate waste, continuously reinvest in skills, improve processes and offer customers a strong perception of value.

More than a success story in large-scale retail, Mercadona represents a management lesson. This is probably why it continues to be one of the most widely studied business cases in Europe.

For entrepreneurs, the message is clear: lasting competitive advantage does not necessarily belong to those who grow fastest, but to those who build an organisation capable of continuous improvement and of transforming quality, innovation and management culture into value that is difficult to replicate.

Sources

Mercadona. (2026). Annual Report 2025.

NielsenIQ. (2025). European Grocery Loyalty Rankings, data released by FoodRetail.es.

FoodRetail.es. (2025). “Mercadona, the chain with the highest customer loyalty in Europe”.