MERCADONA in Portugal?

The Spanish retailer giant, leading in retail sector into the neighbouring country stated it will start to operate in Portugal from 2019. In order to accomplish the project, it created a local company and started the recruitment process.

It is somewhat surprising and unexpected move from Mercadona. The market in Portugal has been dominated by SONAE (Continente) and Jerónimo Martins (Pingo Doce supermarkets and Recheio C&C) which together represent more than 55% market share. Up to now the International multiples that have been approaching the market have not been able to defy the local ones. Carrefour and Plus exited the market, Albert Heijn has never been able to make good use of its shareholding agreement in Pingo Doce and Makro, Auchan, Lidl, Intermarché or Aldi, are all there, none higher than 10% market share. The strengths of MERCADONA in Spain, in particular its logistics and supplier network can be leveraged by an extended Portuguese operation, but it will not be easy to achieve relevant positions in such a crowed and mature market.