Mercadona, a Spanish supermarket chain is not only committed to offering the lowest prices but also personalized customer service. For over a decade, Mercadona has had steady profits and do so for more than a decade. In 2008 it had 1,210 supermarkets.
In 2008, its performance, operation-wise was superior to other Spanish chains and also foreign chains in the business. It’s sales per square foot was 60 percent higher than French retail chain Carrefour and twice more than an average U.S. supermarket. But all this was not achieved by neglecting its employees or cutting labor costs. In fact, Mercadona employees received more wages and training (20 times more training) than what the average American retailer offers. An indication of better employee productivity is the 18% higher sales per employee than other comparable Spanish chains (50% higher than U.S. chains).
HR Secrets of Success
Stable labor policy – Permanent contracts and Better pay
While Spain and Spanish retail chains are known as leaders in offering temporary contracts to employees, Mercadona is recognized for its stable labor policy. It offers only permanent contracts to its employees from the start. It also offers average pay better than the rest of the industry sector.
In 2008, when sales growth slowed down Mercadona still gave a EUR 190 million bonus to its staff, 19% more than a year earlier. CEO Juan Roig acknowledged his employees contribution and hard work and that they could not be solely responsible for the downturn. For promotions, employee coordinators assess employees based on a series of parameters and on their own judgement.
Additional month of maternity leave
Newspaper El País reported that Mercadona extends the legal four months of maternity leave to five months but on a discretionary basis and also based on certain conditions like foregoing pay rise or bonus.
A few of Mercadona locations have nurseries to look after children and also free services like day care, food etc.
Mercadona provides an average of 60 hours of training per worker per year with all executives trained within the company. In 2008, Mercadona employees received more training (20 times more training) than what the average American retailer offers. In 2008, Mercadona spent €5,000 for each new store employee and four weeks in training time compared to just seven hours in the U.S.
Cross-training and Predictable Schedules
By cross-training employees, Mercadona ensures that employee productivity is not related only to store traffic. A store cleaner is trained on a cash register which he/she can operate during more traffic times, while a cashier can stock products on the shelf during less-traffic time. As a result, Mercadona is able to provide monthly schedules to their employees as compared to the U.S. chains which find it very difficult to even provide a weekly schedule to its full-time employees. This (stable hours and salaries) has resulted in Mercadona having only a 3.8 percent turnover rate with over 85% full-time employees.
No work on Sundays
Mercadona supermarkets do not open on Sundays and not even in tourist resorts to ensure work-life balance.
Ensuring employee productivity
To avoid employees coming late to work, Mercadona managers only recruit employees who stay no more than 10 minutes walking distance from the stores.
Department Specialists and Prescription Instructors
Mercadona stocks only the highest-quality and affordable products. A customer can walk up to a department specialist in the store and ask for advice on buying a particular product. The department specialists know everything about the products the store stocks. Any product changes are in the knowledge of the specialist. By stocking lesser products, the specialist has less information to remember. Field employees known as ‘prescription instructors’ constantly visit stores in their area to know what customers were saying about Mercadona’s products and service. Such information is conveyed back and forth in the chain to the management and to the suppliers as well.
To Mercadona, before it thinks about impact on the profits it always thinks about society, its suppliers, its customers and also its employees.