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MADRID, March 2 (Reuters) - Spanish discount food retailer Mercadona will curb 2017 profits in order to invest up to 1.2 billion euros ($1.3 billion) this year on refurbishing and opening new stores, improving logistics and expanding into Portugal.
Spain's biggest supermarket chain said 2017 profits would be around 200 million euros - about a third of last year's - as the family-owned company made what it called the biggest capital expenditure in its history.
"In order to invest in Mercadona's future, it has been decided to sacrifice profits in the short term," Chairman Juan Roig said, adding the unlisted company would not focus on profits this year or next.
Founded nearly 40 years ago in the Mediterranean region of Valencia, Mercadona has become one of Spain's biggest supermarket chains and one of the country's biggest employers, with around 79,000 staff.
Unlike rivals DIA or Carrefour, the chain has shunned acquisitions, preferring to grow by building around 60 stores per year. It has a market share of nearly a quarter of Spain's food retail market, more than 10 percentage points above Grupo DIA and Carrefour.
The company on Thursday reported annual profit of 636 million euros, 4 percent higher year on year. Capital investment was 685 million euros, it said in a statement.
It also said it created 4,000 new jobs in 2016 in a country with one of the highest unemployment rates in Europe. ($1 = 0.9515 euros) (Reporting By Emma Pinedo, Writing by Sonya Dowsett; editing by Susan Thomas)