MADRID (Reuters) - Spanish discount food retailer Mercadona said on Tuesday it would invest 8.5 billion euros (7.53 billion pounds) in the next six years on refurbishing stores and improving logistics in a competitive Spanish market.
Mercadona, which has become Spain’s biggest supermarket chain and one of the country’s biggest employers, with around 84,000 staff, intends to invest a record 1.5 billion euros in 2018, when it plans to open 11 new stores.
Founded nearly 40 years ago in the Mediterranean region of Valencia, the company also said it would increase spending on its digital transformation in order to become more efficient and boost its online sales.
“We are currently firmly committed towards investing to transform Mercadona (...), therefore more than 8.5 billion euros are expected to be invested from equity capital between 2018 and 2023,” Chairman Juan Roig said.
Unlike rivals DIA (DIDA.MC) and Carrefour CAR.PA, the chain has shunned acquisitions, preferring to grow organically.
It has a market share of nearly a quarter of Spain’s food retail market, more than 15 percentage points above Grupo DIA and Carrefour.
The company reported a 2017 annual profit of 322 million euros, 49 percent lower year on year, while capital investment was 47 percent higher at 1 billion euros, it said in a statement.
It also said it created 5,000 new permanent jobs in 2017 in a country with one of the highest unemployment rates in Europe.
Overall sales grew 6 percent to 22.9 billion euros, the company said.
Reporting by Emma Pinedo; Writing by Jesús Aguado; Editing by Paul Day and Mark Potter