Mercadona’s engine is not the white label, but crushing its rivals in profitability by earning less per product

You may like it more or less your cataloghis business strategy or even the forecasts culinary-apocalyptic of its president, but there is something undeniable: Mercadona long ago stopped being a chain of stores to become a social phenomenon. One who depends about 30% of the food distribution market, 51% of the business of prepared dishes and that sets the pace for trends as relevant as that of the merchants. Hence everything that revolves around your finances be interesting.

Especially because when studying them in detail and comparing them with other competing chains there is one fact that draws attention: Although its gross margin per sale is lower than that of other rivals, its profitability ratio is much higher.

The data: 41,858 million. When Mercadona presented its 2025 economic balance, two months ago, there was a figure that made headlines: 41,858 million of euros. That was the company’s consolidated turnover, an interesting fact because it shows an annual growth of 8%, but it actually hides other even more revealing values. One of them is the turnover, net sales, which amounted to 38,178 million. In that case the increase was 7.2%.

If we subtract from that figure what it cost the company to supply its merchandise (28,639 million), we obtain the first relevant piece of information: its gross marginthe money that the company earned after deducting the costs directly attributable to production and sale, such as raw materials or expenses generated during manufacturing. In this case it stood at 9,539 million.

Is it important information? Yes. Above all to understand how the Valencian chain makes money and where it has its strengths (and weaknesses) compared to the competition. At first, those 9,539 million may not tell us much, but a few days ago Five Days subjected him to an analysis which does leave a couple of interesting ideas. The first is that this figure shows that Mercadona’s gross margin represents 25% of its sales. That means that of every 100 euros you earn, the supply costs take 75. From the remaining 25 euros you must get enough money to cover other bills and, above all, generate profits.

It is not a bad percentage (25%) if we compare it with what the Valencian firm registered in recent years, but it is significantly lower than that managed by other competing companies. The calculations of Five Dayswhich are based on the accounts published by the companies, conclude that this margin rises to 26.2% in Dia, 27% in Eroski and 30.1% in Consum.

In theory, this comparison leaves a clear reading: any of these three chains has a larger cushion, once the supply costs have been deducted, to pay the rest of the company’s bills and generate profits.

And the surprise comes. The curious thing is that this ‘photo’ changes when we delve a little deeper into the accounts of Mercadona and its competitors. If we look at the operating resultwhich deducts all operating expenses, including for example salaries, rents, advertising, depreciation, transportation or energy, Mercadona is left with 2,061 million of euros. Given that Juan Orig’s chain invoices significantly more than Dia, Eroki or Consum, that operating result is also much higher in net terms. That’s logical. The curious thing is that it is also true in relative terms, based on the total income of each firm.

In Mercadona this margin is 5.4% while in the case of Día it drops to 2.6%, in Eroski to 4.6% and in Consum to 2.7%. That’s the first surprise. The second comes when we go one step further and look at the net profitalready discounted the financial and fiscal expenses. It is relevant data because it basically shows what the company ‘earns’, the remainder from which the company takes the money with which it then pays dividends to its shareholders and makes reinvestments. In 2025 that benefit was almost 1,729 million, which is equivalent to 4.5% of its turnover. In Dia this percentage of global sales is 2.3%, in Consum it is 2.6% and in Eroski it remains at just 0.9%.

Beyond the numbers. This mixture of percentages can be somewhat confusing, but it is very simple to read: beyond the business volume of each chain, whether it closes the year with more or less millions invoiced, Mercadona has achieved an important milestone. Despite ‘earn’ less per product Than Dia, Eroski or Consum (gross margin), their profitability ratios are much better.

How have you done it? In your annual report The firm assures that it has improved its profitability thanks to the “optimization of processes”, which includes energy savings, “elimination of expenses without added value” and “advances in operational efficiency.” Only the use of ovens in ECO mode saved him two million.

Outrunning the giants. Mercadona’s formula has not only allowed it to stand out from its most immediate competitors. It has also done so in comparison with other heavyweights in the sector internationally. At least in relative terms. a few weeks ago Expansion public an analysis which shows that the Valencian chain has skyrocketed its net profit margin to such a level that it surpasses giants such as Walmart, Costco or Tesco in profitability.

While Mercadona’s net margin is 4.52% (4.52 euros profit per 100 euros in sales), at Walmart it is 3.1%, at Costco 3%, at Tesco 2.52%, at Ahold Delhaie 2.45%, at Dia 2.26%, at Sainsbury’s 0.73% and at Kroger it remains at 0.69%. And that’s just to name a few cases. The Valencian firm not only stands out in the photo finish With respect to its competitors, the figure for 2024 also significantly improves, when the net margin was 3.88%.

Images | M. Peinado (Flickr) and Mercadona

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