Mercadona lands in Porto to clash with retail titans
The Spanish Retail company Mercadona has chosen Porto to open its first four stores in Portugal. But to be successful, the company has to defy the local clans: the Azevedos and the Soares dos Santos
The Spanish Retail company Mercadona has chosen Porto to open its first four stores in Portugal. But to be successful, El País writes, the company has to defy the local clans of retail: the Azevedos (Sonae/Continente) and the Soares dos Santos (Pingo Doce/Jerónimo Martins). The grand opening took place yesterday, Sunday the 30th of June. The Spanish newspaper recalled that both Continente and Pingo Doce appeared in the ’80s, gaining total control of the market by pushing traditional commerce out of the picture.
Different paths were chosen by these so-called “titans”. While Belmiro de Azevedo opted to open the first “Continente” hypermarket in partnership with French Promodès, Jerónimo Martins remained a pure Portuguese-blood company, also opening its first hypermarket in the early ’80s, El País recalls. About 40 years later, they together hold the equivalent to 54% of the Portuguese Retail market, according to Nielsen. Kantar tells us it might be 57.6%.
El País also noted that Sonae diversified its core-business with investments in different sectors, like telecom (NOS), malls (SONAE Sierra) and hospitality. Jerónimo Martins focused its activity on the retail industry, expanding geographically to Poland and Colombia.
These will be the competitors Mercadona is going to challenge in the Portuguese Markert with four stores in the Porto region, opening this July.
However, it will probably not be the only challenge Mercadona will face, according to the Spanish outlet. The fact is the Portuguese love a good bargain. Price reductions represented 46.4% of the total sales in the sector last year in the country, which might clash with Mercadona’s philosophy of standing against them as a commercial strategy.