The president of the Spanish chain Mercadona, Juan Roig, has spoken out against setting maximum prices for certain products to limit the effects of inflation, assuring that it is “an illusion”.
The president of the Spanish supermarket chain Mercadona, Juan Roig, has spoken out against setting maximum prices for certain products to limit the effects of inflation, assuring that it is “an illusion”.
“It is an illusion. We depend on supply and demand and there is nothing that is capable of determining the prices of the products, only the market. Setting prices I think is unrealizable. It’s like saying that water doesn’t get wet”, said the businessman during the presentation of the Mercadona 2022 results, which took place this morning in Valencia. According to the businessman, the “artificial” setting of maximum prices for certain products would eventually be “compensated with [aumentos de preços em] other products” or it would happen “at the cost of reducing the quality of the products or reducing the size of the packages”.
“Blocking prices is impossible. But we are going to fight to lower prices, ”she assured, admitting that“ nothing made us think ”that inflation would reach current levels.
In this sense, Juan Roig has indicated that the “keys” of Mercadona’s strategy to avoid transferring all the impact of cost prices to the sale price of the products have been the reduction of margins, cost control, the increase productivity (7% compared to 2021) and the provision of an “effective assortment”. According to him, the impact of the increase in cost prices reduced the company’s margin by 0.6 points and placed profitability “in one of the lowest values in its history: 0.025 euros of profit for each euro sold, compared to the 0.027 euros from 2021 ”.
Aiming for an “average increase in PVP [Preço de Venda ao Público] of approximately 10% in 2022″, Mercadona adds that the “common effort to curb the impact of cost prices on the shopping basket, […]Through cost efficiency and productivity, he managed to save more than 375 million euros as a whole”.
“During the month of March we lowered the prices of more than 157 products and we will continue trying to lower the cost prices, lower the prices of sale to the public in the shopping cart,” Juan Roig has maintained. In his speech, the president of Mercadona also highlighted the central contribution of “honest” businessmen to the generation of wealth in a country, demystifying the idea that “profit is bad.”
“Getting a profit is essential. But if the only purpose is to earn money, that is no good anymore. It has to be shared with society as a whole, with workers, suppliers, shareholders. But if there are no profits, you can’t reinvest, expand, and sustain a business. This message must be taken to society, ”he said.
Source: Observadora
