In Spain’s generally low-wage supermarket sector, national chain Mercadona stands out for paying 27 per cent over the national minimum wage, increasing to 72 per cent for employees with four years’ experience or more.
Flexible working hours, coupled with Sundays off and an annual profit sharing scheme, are some of the other workplace policies that help place Mercadona as the highest ranked Spanish grocery group in the Financial Times/Statista list of Europe’s best employers.
“In Spain, grocery stores open at 8am or 9am and close at 9pm or 10pm, so it’s a very long day,” notes Jaime de Nardiz, director of cultural transformation and innovation at Great Place to Work Spain. “And it’s not like an office job, it’s very intensive . . . which is why flexibility is such a high priority.”
As with most good employers, Mercadona’s reputation for going the extra mile is born, in part, from a culture of putting its people first and, in part, from a hard-nosed calculation that good employment practices pay off.
From its origins in 1977 as a small butcher’s shop in a village outside Valencia, Spain’s largest supermarket chain, with 1,614 stores and more than 100,000 employees, remains very much a family affair.
For the last four decades and more, it has been run by Juan Roig, son of the owner of that erstwhile Valencian butcher and Mercadona’s majority shareholder. The other principal owners include Roig’s wife, Hortensia Herrero, and his brother, Fernando.
Together with Herrero, who serves as Mercadona’s vice-president, Roig is widely credited with investing heavily in culture, sport, and entrepreneurialism, much of which is channelled through the couple’s charitable Legacy Project.
In the wake of the flash floods that hit Valencia last year, for example, Mercadona was quick to finance a large number of community projects to help get the city back on its feet. Each year, it also donates about 25,000 tonnes of food staples, equivalent to 420,000 shopping trolleys, to vulnerable groups.
Such moves enhance its ‘employer brand’, as evidenced in its second-place ranking in reputation monitoring service Merco’s benchmark index of Spain’s most respected brands. Its nearest competitor is department store El Corte Inglés (16), followed by supermarkets Carrefour (43), Eroski (53), Lidl (61) and Dia (105).
“Mercadona is known for taking a lot of care of the quality of their products [but] also for investing in its people and in innovation and entrepreneurship . . . it’s a family that is just returning a lot of money to society,” observes Manel Pérez-Jordana, founder of the Barcelona-based talent development specialist, Byknowmads.
Being privately owned, Mercadona also has more flexibility to reinvest in its business rather than paying out dividends to shareholders, as with its multinational rivals, Pérez-Jordana notes.
El Corte Inglés, placed 13th overall in Spain in the new FT ranking, has similar advantages as a non-listed company.
In recent years, a substantial part of this reinvestment has gone on digitising Mercadona’s operations. As well as improving efficiency, the move has stripped out many of the routine jobs that sap employee morale and instead opened up avenues for more engaging work.
Ploughing profits back into the business has also helped finance the chain’s rapid expansion, including into neighbouring Portugal. This, in turn, has created opportunities for entry-level employees to progress within the company, a prospect encouraged by Mercadona’s active policy of skills training and recruiting from within. Last year, for instance, the supermarket racked up 4mn training hours in total.
“In Spain’s best-run grocers, they encourage internal promotion, which means you can start as a shelf-stacker and go on to become the commercial director at some point if you are good. If you’re a skilled employee already, then that’s also very attractive,” points out Maria Miralles, lead partner for the retail sector in Iberia at consultancy firm, McKinsey.
With Spain’s economy growing at five times the Eurozone average, employee retention presents an increasingly important business imperative. Lose a skilled fishmonger or butcher to a rival grocery chain, Miralles notes, and finding a replacement “off the street” is almost impossible.
The problem is exacerbated by Spain’s birth rate, which has slowed by almost 25 per cent over the past decade, thus reducing the number of young people coming into the workforce. To hold on to the almost one-third of workers who now are more than 55 years old, therefore, the sector’s top employers are doubling down on practices such as flexible working and employee wellbeing that older workers are known to prioritise.
An emphasis on recruitment and retention also explains the generous payment terms at Spain’s best-performing supermarkets. Since the introduction of its annual profit-sharing scheme in 2001, for example, Mercadona has shared €6.88bn with its workers. In the most recent bonus round, the policy saw workers with four years’ experience or more receive an extra €6,000 gross, equivalent to about three months’ salary.
Increases in Spain’s minimum wage are narrowing the gap in base pay across the industry, however, creating a focus on non-wage benefits, says Elena Orden, spokesperson in Spain for Merco. Most notably, in a sector characterised by high insecurity, the offer of long-term contracts by the likes of Mercadona and El Corte Inglés marks them out as different.
“In Spain, we have an inverted pyramid in terms of the working population,” says Orden. “So, if you want to have the best workers, you need to offer them what others do not and put their wellbeing high among your priorities.”
