MADRID, March 2 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
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