Andalusia, with its almost eight and a half million inhabitants, is a sufficiently prominent market for most national and international operators to have it among their priorities. However, and in view of the trend towards business concentrations in the food-based distribution sector that have taken place throughout Europe, some regional operators remain in this community that not only have not lost market share, but some cases have won and have also decided to expand throughout the rest of the national territory, as is the case of Covirán in Granada.
neighborhood stores
Andalusia has just over 4,400 stores, super and hyper and a commercial density of 2,776.6 square meters per 1,000 inhabitants, very similar to the national average (2,778.8), according to Alimarket data. However, the data offered by the General Directorate of Commerce of the Junta de Andalucía highlight that in this region there is a greater weight of “self-services”, the name by which traditional neighborhood stores are called – with less than 400 meters squares-.
These businesses have a market share of 19.6%, three points higher than the national average, located at 16.7%. For their part, supermarkets account for the bulk of this sector, with a share of 69.2% -equal to the national one-, and in third place are hypermarkets, which account for 13.9% of the area in Andalusia – slightly lower than the rest of Spain, 14.2%-.
In Andalusia, the Valencian firm Mercadona has been leading the food distribution market for several years, with a market share of over 20%. Throughout 2016, it has opened four supermarkets, two of which have been due to the closure of stores that did not meet the standards required by the company. Therefore, it has made two net openings -both in the capital Seville-, after which, at the end of 2016, the chain had 348 stores distributed throughout the Community, three logistics blocks and a workforce of 17,000 workers.
This company also has 30 Andalusian firms as integrated suppliers. Mercadona’s purchases from Andalusian suppliers grow year after year and exceed 2,700 million, a figure that responds, in large part, to the change in the management of fresh produce, which has allowed the company to have products from more local suppliers.
After Mercadona, the big operators such as Dia or Carrefour are committed to gaining an important niche in the Andalusian market, opening new brands of their self-service formats, such as Dia Market or Carrefour Express. In addition, in both cases they have taken advantage of the partial withdrawal of the Community from the Eroski firm. In 2015, the Basque company sold a total of 144 supermarkets to Dia, 24 of them in Andalusia, for 160 million euros. And later, last year it also reached an agreement with Carrefour to sell it 36 hypermarkets, six of them in Andalusia, for 205 million euros.
A year ago, before these purchases, Dia was already in second place in Andalusia, with a market share of 14.7%, of which 8.8% corresponded to its own network and the rest to franchises.
The case of Covirán
However, and despite the challenge of national and international operators, several regional companies maintain and expand their base. This is the case of Covirán, a cooperative of Granada origin that began its activity in 1961 and that today has become a benchmark in its sector on the Iberian Peninsula.
At the end of 2016, Covirán has a total of 2,775 members in the Iberian Peninsula and 2,550 supermarkets that operate under its banner (2,350 in Spain and 200 in Portugal), figures that rise to 3,300 points of sale if associated businesses are considered to the chain In Andalusia it has a market share of around 8.5 percent.
Covirán has closed 2016 with gross sales under banner of 1,260 million euros, which represents an increase of 4 percent compared to 2015. The CEO of Covirán, Luis Osuna, revealed last week that the cooperative has been marked as The objective for 2020 is to achieve gross sales under banner of 1,500 million euros, for which the expansion plans of the firm will be fundamental, which has marked the Canary Islands, Catalonia, Madrid and Galicia, as well as Portugal and Morocco as priority territories in its growth.
Another significant case within the food distribution sector is that of the Huelva-based company Cash Lepe, which in 2016 celebrated its 50th anniversary in top form, clearly leading the province of Huelva and ranked among the top five operators at a regional level. The company has more than 194 El Jamón supermarkets, with a market share of 3.7% in Andalusia, and a turnover of more than 200 million euros with 1,500 employees. Cash Lepe launched a second brand in 2012, Maxico, a hybrid between a supermarket and cash & carry, which now has 11 stores. In addition, Huelva has eight establishments under the Diador brand.
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