“We raised the prices a bit, but not doing so would have been a disaster for the assembly line.” Juan Roig said this yesterday at the presentation of the results of Mercadona, a company that obtained a net profit in 2022 of 718 million euros, 5% more than in the previous year, with a turnover of 31,041 million, an 11 % month. The president of the Valencian company, leader of the sector in Spain with a market share of 27%, devoted a large part of his speech to explaining the “enormous effort” that Mercadona has made “to overcome a perfect storm of inflation, rising energy prices and the war in Ukraine”. “I had never seen a price increase like this since the Pactes de La Moncloa; nor had we had such a tension with the suppliers”, he added.
He gave as an example that the increase in the costs of raw materials has been 12%, and that the increase in consumer prices has been 10%, two points less. “Assuming 2% is a lot for us and involves 600 million costs”, he added. The impact of the increase in cost prices forced Mercadona to reduce the margin by 0.6 points and put profitability at one of the lowest in its historical series: 0.025 euros of profit per euro sold, compared to 0.027 euros from 2021. Juan Roig recognized that this scenario has been and continues to be very complex. He also acknowledged that “we are very worried”, because the skyrocketing inflation affects customers with lower incomes: “For those who earn less, it is nonsense what affects them personally”. He detailed that there were times when some basic products had gone up so much that the challenge was “either to have them with those increases or not to have them on our shelves”. He talked about vegetables, with cases such as the 50% increase in prices, in some periods, of tomatoes. But also of “basic things, like sugar, rice; we are the first to want the lowest prices, but it is the law of supply and demand and we cannot intervene”.
He rejected, in this context, the possibility of limiting prices: “We would all like it, but we depend on supply and demand, it is impossible”, he said. Yes, he was in favor of collaborating with the initiative led by the Valencian president, Ximo Puig, to try to establish “good consumption” for the most disadvantaged families. “If we all do it, it seems good to me, we are ready to help”, he said.
Juan Roig, who runs a company that already has 99,000 workers and 1,676 stores, and which continues to penetrate strongly in Portugal, did not want to argue with the harsh attacks he has received from Podemos leaders such as Pablo Iglesias or Minister Ione Belarra, who they have labeled him a “wild capitalist”. “I respect these opinions even though I don’t share them”, he answered the journalists’ questions. He did offer a reflection on the danger of demonizing company profits: “Having profits is a very good thing, even if in Spain it seems that we don’t want to share it if we are doing well. But the goal of a company for me is not to maximize profit, it is to maximize profit for everyone: the bosses (customers), workers, suppliers, society and capital”. He acknowledged that in Spain “Mercadona has almost reached its ceiling, we will not be able to exceed 1,700 stores” and did not rule out making the jump to another European country in the future. Of course, when asked about the Ferrovial case, Roig stated that “Mercadona is staying in Valencia”.
