Introduction: It Doesn’t Rely on Complex Promotions, Yet Captures the Largest Slice of Spain’s Supermarket Market

 

There is a supermarket that, internally, does not refer to customers as "consumers," but rather as El Jefe — Boss.

 

This sounds like a clever service slogan. But at Mercadona, "Boss" is not a polite form of address — it is an operating principle: whether a product makes it to the shelf, how prices are set, how stores are designed, how employees work, and what products suppliers develop — all must return to the same question:

Does this truly solve the "Boss’s" needs?

 

While most retail companies are still competing for customers through discounts, loyalty points, and member days, Mercadona has chosen a different path: no reliance on frequent promotions, no pursuit of endless product expansion. Instead, through stable pricing, curated selection, customer co-creation, employee investment, and supply chain collaboration, it continuously reduces customers’ cost of choice and cost of living.

 

This seemingly restrained business approach has helped Mercadona maintain its position as Spain’s leading food retailer. According to Kantar data, Mercadona’s market share increased by another 0.5 percentage points in 2024, continuing to lead the limited-assortment retail market. In 2025, Mercadona achieved consolidated sales of EUR 41.858 billion, an 8% year-on-year increase; net profit reached EUR 1.729 billion, with 1,672 stores and 115,000 employees.

 

What is truly worth studying about Mercadona is not the nickname "Boss," but how it embeds customer decision-making power into the business system composed of products, prices, stores, employees, and the supply chain.

 

 

01 The Essence of Supermarket Competition Is Shifting from "More Products" to "Helping Customers Choose Right"

 

Food retail is a high-frequency, essential industry that is highly susceptible to homogenization.

 

The problem consumers face is no longer "having nothing to buy," but rather that choices have become increasingly complex:

 

the same category has dozens of brands and sizes; different stores’ promotion schedules, discount thresholds, and membership rules constantly change; private label products are cheaper but may raise quality concerns; supermarkets are getting larger, yet completing a household shopping trip takes longer and longer.

 

Kantar’s research on the Spanish market shows that the importance of one-stop shopping, promotions, and private label quality is rising, but proximity and value for money remain core factors in consumer choice. The continued growth of limited-assortment retailers’ market share also suggests that consumers do not necessarily need more choices, but rather higher-quality, more trustworthy choices.

Mercadona identified a key contradiction from this:

 

Customers superficially want more choices, but in reality, they want to reduce the risk of choosing wrong.

 

Therefore, it did not position itself as a "shelf landlord" filled with merchandise, but instead sought to become a "choice advisor" for customers’ household lives.

 

What it offers is not just food and daily necessities, but a kind of consumer certainty:

Without repeated price comparisons, without studying complex rules, and without struggling among a large number of similar products, one can obtain a reliable-quality, reasonably-priced household consumption solution.

 

02 From "Selling Products" to "Helping Customers Make Choices"

 

Mercadona’s official business philosophy explicitly states that the company’s most important goal is to ensure that the customer — referred to as "The Boss" — is always satisfied, with the "Boss" at the center of corporate decision-making. At the same time, the company does not pursue customer satisfaction in isolation, but views customers, employees, suppliers, society, and capital as an interconnected whole.

 

 

This means that Mercadona does not understand customer experience merely as whether store employees are enthusiastic or whether checkout is fast enough, but redefines value from the source of operations:

 

• Which products should be offered;
• Which products are not worth occupying shelf space;
• How to lower prices while maintaining quality;
• How to help customers complete purchases faster;
• How real customer needs enter product development;
• How employees and suppliers jointly fulfill commitments.

Mercadona’s core values can be summarized in three keywords:Certainty、Ease、Trustworthiness

 

"Certainty" means customers don’t have to wait for a promotion day to trust that prices are reasonable.

"Ease" means the company proactively curates products, reducing ineffective choices and repetitive comparisons.

"Trustworthiness" means every shopping trip delivers relatively consistent quality, without constantly bearing trial-and-error costs.

 

Therefore, what Mercadona promises is not simply "cheaper," but:

Helping customers buy the right products more easily, at a lower overall cost.

 

This cost includes not only product prices, but also time costs, choice costs, price-comparison costs, trial-and-error costs, and the psychological costs of quality uncertainty.

 

 

03 Not Creating "Cheapest Today," But Building "Trustworthy Every Day"

 

Promotions are the most common competitive tool in traditional supermarkets.

 

Limited-time discounts, member exclusives, "buy one get one half off," and "spend X get Y off" can quickly create purchasing impulses, but they also bring new experience burdens:

 

Customers need to remember promotion schedules, calculate discount thresholds, compare different channels, and may even delay purchases due to the fear of "paying too much now."

 

Mercadona chose a different logic: through relatively stable prices, it reduces customers’ anxiety about timing their purchases.

 

Harvard Business School’s long-term research on Mercadona points out that the company can simultaneously offer competitive prices, high-touch customer service, and employee benefits above the industry average. Its advantage does not come from any single measure, but from the coordinated combination of pricing, products, employees, and store operations.

 

 

For customers, this pricing strategy sends a clear signal:

You don’t have to wait for a specific day, and you don’t need to master promotion rules. Buying now is a reasonable choice.

 

Mercadona thus transformed pricing from a short-term marketing tool into a long-term trust mechanism. Traditional promotions create the excitement of "getting a bargain"; Mercadona aims to create the peace of mind of "never worrying about overpaying," every day.

 

 

04 More Products Is Not Always Better — the Key Is That Every Choice Has Value

 

Many large supermarkets view "more brands, more sizes, longer shelves" as their competitive advantage.

 

Mercadona, however, believes that too many products not only increase the customer’s choice burden, but also raise the complexity of inventory management, restocking, display, and employee training.

 

Harvard Business School case studies documented that compared to American supermarkets, Mercadona offers approximately 43% fewer products per unit of store area. It is not simply reducing products — it believes that retailers have a responsibility to curate better-quality, more reasonably-priced products and then provide clear recommendations to customers.

 

This "less" does not mean a lack of choice. It represents the company proactively taking on a portion of the work that customers would otherwise need to do themselves:

 

• Comparing the quality of different products;
• Judging whether functions overlap;
• Identifying which sizes truly offer value;
• Eliminating products that cannot solve a clear need;
• Selecting solutions that can be supplied consistently over the long term.

 

The logic of traditional supermarkets is "put more products in front of customers to choose from."

Mercadona’s logic is:

The company does professional curation first, then lets customers make simple choices.

 

Through this, Mercadona shifted from being a product displayer to a problem solver. When customers enter a store, they don’t have to hesitate among dozens of highly similar products, but can make decisions faster within a curated product assortment.

 

 

05 Customers Are Not the End Point of the Innovation Process, But the Starting Point of Product Definition

 

One of Mercadona’s most distinctive capabilities is its customer co-creation mechanism.

 

Traditional retailers’ product development typically follows a linear path:

->Supplier develops product

-> Retailer purchases and shelves

-> Customer decides whether to buy In this process, customers can only express their opinions through purchase or abandonment after a product is completed.

 

 

Mercadona, however, brings customers in before a product is even born.

 

Through co-creation centers, the company invites customers to demonstrate how they cook, clean, wash, store, and use products. The team does not merely ask customers "what they want," but observes the actions, obstacles, and compromises that arise during real use.

 

In 2025, Mercadona conducted 8,500 co-creation activities with customers across 20 co-creation centers in Spain and Portugal. These activities directly contributed to product improvements and new product development.

 

 

This mechanism typically follows a complete path:

->Discover real needs

-> Observe usage scenarios

-> Define solutions

-> Find specialized suppliers

-> Develop product prototypes

-> Invite customer testing

-> Small-scale validation

-> Roll out to more stores

 

Its biggest difference from ordinary market research is that Mercadona does not merely listen to customers’ expressed attitudes, but enters customers’ real tasks.

 

Because what customers say they want and how they actually behave in daily life are often not entirely consistent.

 

Surveys might tell a company that customers want "more features"; real-life scenarios might reveal that what customers truly need is easier-to-open packaging, more appropriate portion sizes, fewer operational steps, or more easily storable product formats.

 

Mercadona thus upgraded "listening to customers" to "defining problems together with customers." Customers are no longer just buyers of products, but co-designers of them.

 

 

06 Key Moments in the Customer Journey: Reducing Friction at Every Step

 

Mercadona’s experience is not distinguished by luxury, entertainment, or ceremony.

 

It focuses on the frictions of daily shopping: where customers waste time, where they hesitate, and where they experience uncertainty.

 

Before entering the store: No need to research when to buy for the best deal

Stable pricing reduces customers’ dependence on promotion cycles. Customers don’t need to repeatedly check ads for promotions, nor worry that prices will drop right after they buy. It first addresses pre-purchase price anxiety.

 

After entering the store: Find what the household truly needs, faster

Curated selection, clear zoning, and standardized stores together reduce customers’ ineffective movement within the store. Mercadona does not aim to keep customers in the store as long as possible, but to help them complete a high-quality shopping trip in a reasonable amount of time.

This is a classic "efficiency-driven experience": it doesn’t rely on entertainment to extend dwell time, but builds goodwill by reducing obstacles.

 

At the shelf: No need to agonize over dozens of similar products

A leaner product structure reduces choice complexity, and frontline professional staff can provide advice tailored to specific uses. Harvard Business School’s case specifically mentions Mercadona’s category specialists: customers can ask which cut of meat is better for stewing, which daily product is better for family use — and providing such professional advice is itself part of the employee’s job.

 

Back at home: Products that truly fit daily use

Whether packaging is easy to open, portions are reasonable, preparation is convenient, and performance meets expectations — these determine whether customers repurchase. Through the co-creation mechanism, problems identified in home use can feed back into product development and supplier production, forming a continuous loop:

Use -> Feedback -> Improvement -> Re-use

 

When life rhythms change: From selling ingredients to solving a meal

As household sizes shrink, work pace accelerates, and demand for instant meals increases, Mercadona began strengthening its "Ready to Eat" meal offerings. This is not simply adding a deli counter, but shortening the customer’s task from "buy ingredients and process them at home" to "quickly obtain a ready-to-eat meal." Kantar considers this new format, combined with store renovations, to have enhanced Mercadona’s brand appeal.

 

Online shopping: Save time while maintaining outcome certainty

In 2025, Mercadona’s online business sales reached EUR 1.061 billion, covering 218 stores with approximately 3,000 dedicated employees.

 

 

The core task of the online channel is fundamentally the same as offline:

Enable customers to obtain household purchases with relatively stable quality and predictable outcomes, at a lower time cost.

 

 

07 What Truly Supports the "Boss" Is Not a Slogan, But the Employees

 

Calling customers "boss" is not difficult.

 

The hard part is getting over a hundred thousand employees, in their daily restocking, checkout, merchandising, consulting, delivery, and problem-solving, to act in accordance with that title.

 

Many retail companies view frontline employees as costs to be minimized. Mercadona, however, treats employees as the shared foundation of customer experience and operational efficiency.

 

In 2025, Mercadona’s total workforce reached 115,000, with 5,000 new positions created. The company invested EUR 135.4 million in employee training that year and shared operating results with employees through bonus mechanisms.

 

The underlying logic is not complicated:

• Stable positions lead to accumulated experience;
• Systematic training builds category knowledge;
• Relatively predictable work schedules improve employee morale;
• Fair compensation makes employees willing to continuously identify problems and improve processes.

 

Harvard Business School considers Mercadona a representative case of the "Good Jobs Strategy." Research found that by increasing training, developing multi-role capabilities, and providing relatively stable scheduling, it not only improved the employee experience but also raised store service quality, inventory efficiency, and labor productivity.

 

 

This formed a clear value chain:

• -> More stable employee experience
• -> More professional on-the-spot judgment
• -> More reliable customer experience
• -> Higher repurchase rates and operational efficiency

Mercadona’s key insight is:

Customer experience cannot bypass employees and reach the store directly from management.

 

How employees experience management ultimately transmits to customers through service attitude, execution quality, and problem-solving ability.

 

 

08 Suppliers Are Not Bidding Targets, But the R&D System for Customer Experience

 

What customer co-creation produces is often not a fully defined product, but an unsolved life problem.

 

For example, a customer may not explicitly state the need for a certain packaging structure, but only exhibit inconvenience during use; they may not directly request a product size, but waste occurs because the portion is wrong.

 

Mercadona needs to first translate these behaviors into clear requirements, then find specialized suppliers with the corresponding technology and manufacturing capabilities.

 

Therefore, suppliers in Mercadona’s system do not merely provide quotes and capacity, but participate in:

• Product concept definition;
• Raw material and formula optimization;
• Packaging and specification design;
• Production process improvement;
• Cost-quality balance;
• Continuous iteration after customer testing.

 

A Harvard case study recorded a very small but representative improvement: Mercadona persuaded a hand cream supplier to change a raised bottle cap to a flat one. This change made the product easier to stack, reduced store operation complexity, and created room for price reduction.

 

Such improvements are not flashy, but they illustrate how Mercadona understands experience:

Truly valuable innovation is not necessarily launching a new product category — it can also be simultaneously making things more convenient for customers, easier for employees to handle, and cheaper for the supply chain.

 

In 2025, Mercadona’s supplier-related investment reached EUR 1.7 billion. Through long-term collaboration, the company transformed its supply chain from a cost center into a joint R&D system for product innovation and customer experience.

 

 

Competitors can copy a single product, but cannot quickly replicate this collaborative capability of continuously discovering problems, defining products, and delivering at scale.

 

 

09 It Doesn’t Pursue Occasional Customer Delight, But Long-Term Customer Reliability

 

Many service businesses excel at creating peak experiences: an unexpected gift, a touching service moment, a widely shared story.

 

Mercadona’s experience is more restrained.

It rarely relies on dramatic service gestures, but instead continuously reduces the daily frictions of high-frequency shopping:

 

• Not letting customers get trapped in complex promotion calculations;
• Not letting customers face large amounts of meaningless product redundancy;
• Not letting low prices come at the cost of quality control;
• Not letting customer feedback stop at the customer service department;
• Not compressing employees into low-cost execution tools;
• Not treating suppliers merely as targets for price pressure.

 

Therefore, Mercadona’s experience peak is not a single touching service story, but a repeatedly reinforced sense of certainty:Every time I come, I roughly know what I’ll get.

 

In low-frequency industries, surprise may create memories.

But in a high-frequency industry like food retail, what truly affects loyalty is often not a single powerful surprise, but long-term consistency in not letting customers down.

 

"Always reliable" is itself an experience of excellence with a powerful compounding effect.

 

 

10 Experience Is Not a Cost — It Is Another Expression of Efficiency

 

Mercadona’s approach appears to require significant investment:

• Improving employee compensation;
• Continuous training;
• Building co-creation centers;
• Renovating stores;
• Developing online fulfillment;
• Joint R&D with suppliers.

 

But these investments do not set experience and efficiency against each other. On the contrary, they reduce significant hidden waste within the operating system:

 

• Curated products reduce inventory and restocking complexity;
• Stable pricing reduces the operational costs of frequent promotions;
• Stable employees reduce turnover and repeated training costs;
• Customer co-creation increases the success rate of product innovation;
• Supplier collaboration reduces ineffective R&D disconnected from demand;
• Customer trust increases repurchase rates and basket share.

 

In 2025, Mercadona’s sales grew 8%, net profit increased to EUR 1.729 billion, and labor productivity rose approximately 4%. The same year, Kantar BrandZ ranked Mercadona as Spain’s ninth most valuable brand, with brand value reaching approximately USD 3 billion, up 33% year-on-year.

 

These results show that Mercadona is not choosing between "experience" and "efficiency." It is redefining efficiency through better experience.

 

 

11 Why Is Mercadona Hard to Replicate?

You Can Copy the "Boss" Title, But Not the Decision-Making Power

Any company can declare "customer first." The real test is whether, when customer value conflicts with short-term profit, departmental interests, or internal convenience, the company is still willing to give customer needs higher priority.

 

You Can Copy Private Labels, But Not the Customer Co-Creation Capability

Mercadona’s advantage is not merely having private label products, but building a system for continuously discovering needs, defining products, co-developing, and validating improvements. Products are the result; organizational capability is the cause.

 

You Can Copy Low Prices, But Not the Systemic Cost Advantage

Simply cutting prices can easily damage quality, employees, and suppliers. Mercadona’s stable pricing is built on product curation, process optimization, employee productivity, scale purchasing, and supply chain collaboration. Without these foundations, low prices ultimately devolve into unsustainable price wars.

 

You Can Copy Store Design, But Not Employee State

Space, equipment, and digital tools can be purchased, but employees’ professionalism, stability, and sense of responsibility require compensation, training, scheduling, job design, and management mechanisms to be shaped over time and together.

 

You Can Copy a Single Touchpoint, But Not the Complete System

What truly constitutes Mercadona’s moat is not any single point among price, products, employees, or suppliers — but the fact that these elements are interconnected and mutually reinforcing. As Harvard Business School research points out, Mercadona’s success comes not from any single measure, but from the coordinated operation of multiple components.

 

 

12 Five Lessons for Chinese Companies

 

First: Customer-Centricity Is Not About Service Attitude, But Decision-Making Priority

What companies truly need to answer is not "do we value customers," but: when customer value conflicts with departmental interests, short-term sales, or internal efficiency, who gets higher priority?

 

Second: Experience Innovation Doesn’t Always Mean Addition — Subtraction Works Too

Reducing products, reducing rules, reducing wait times, reducing information noise — these can all create experience value. Good experience is not about having more services, but about customers expending less wasted effort.

 

Third: Move User Research from the Conference Room to the Real-Life Scene

What customers express as needs and how they actually behave in real situations often differ. Companies need to observe users’ tasks, actions, obstacles, and alternatives — upgrading from "collecting opinions" to "co-defining problems."

 

Fourth: Employee Experience Is a Prerequisite for Customer Experience

Frontline employees’ instability, low empowerment, and low professionalism ultimately transmit to customers in the form of slow responses, indifferent service, operational errors, and problem deflection. Customer experience system building cannot bypass employee mechanisms.

 

Fifth: The Real Experience Barrier Is a System That Consistently Produces Good Experiences

A single impressive touchpoint is easily imitated. Only when brand promise, product innovation, customer journey, employee mechanisms, supply chain collaboration, and business metrics are interconnected can experience transform from a periodic project into an enduring corporate capability.

 

Conclusion: Customers Are Not the End Point of Transactions, But the Starting Point of Business

 

Mercadona’s success, on the surface, comes from stable pricing, curated selection, private labels, and efficient stores. The deeper reason is that it redefined the relationship between the company and its customers.

 

In traditional retail logic, customers are the end point of transactions: companies produce or procure products, then find ways to sell them.

 

In Mercadona’s logic, customers are the starting point of business:

Customers raise needs, employees identify problems, the company defines solutions, suppliers complete innovations, stores and online channels deliver value, and business results feed back into the entire system.

 

This forms a complete growth chain:

• Customer insight drives products,
• Employee experience drives service,
• Supply chain collaboration drives quality,
• Operational efficiency drives low prices,
• Long-term trust drives growth.

 

Mercadona calls customers "Boss." What’s truly remarkable is not the title.

 

It’s that it has proven through long-term operations:

When a company truly treats customers by the standard of "boss," customers will — through choice after choice — elevate it to industry leadership.