Mercadona (Spain): a retail model in expansion

Abstract

Purpose – This paper evaluates the effect of Spain's regulatory framework on Mercadona's expansion. Mercadona is the main company in this commercial distribution sector and so we have taken the North American company Wal-Mart as a classic example of the sector on a world scale. In Spain the regulatory framework is characterized by the high grade of autonomy of the regional governments over the development of business regulation. In other words, the main objective is to check the extent of competitive bias resulting from regulatory risk. Design/methodology/approach – The article discusses the stores and retailers of Mercadona. Through the use of quantitative indicators the degree of concentration-dispersion is studied, which is reflected graphically with a series of maps. It also discusses the normalisation constraints by quantitative data analysis from a region with trade liberalisation criteria (Madrid) and another with criteria for restricting the construction of large retail outlets (Barcelona) Findings – In the commercial distribution sector, certain firms stand out due to their rapid expansion, firms that have been successful in implementing widely different business philosophies. This article interprets the course and the immediate challenges for Mercadona, taking Wal-Mart as a reference, since this company is already at a more advanced stage of development: the conversion of an operator on an international scale. Originality/value – The study described helps in understanding the process of forming a large commercial distribution chain in Southern Europe. This example in turn allows an understanding of business concentration processes in this sector.