Why Amazon is tasting the Spanish Mercadona
The Spanish large-scale retail trade, Mercadona, is targeted by Amazon. Mario Sassi's article
It was long ago that Amazon was monitoring the best signs of the Europeanmass retailers and their respective countries to score the decisive thrust. Europe is too important for its expansion.
AMAZON'S MOVES IN GDO
With the failure of the Canadian Couche Tard operation, the French market proved too complex for such a sensational entry. However, Carrefour has been valued for a long time by Amazon. More or less at the same cost as Whole Foods, the third European brand present in other parts of the planet would be secured. Nothing to do. And then there are the presidential elections looming.
AMAZON BETWEEN ITALY AND SPAIN
The same is true for Germany where the size of the signs, their type and consumption patterns make an entry of that type complex. With Great Britain left out, at least for the moment, two options remained on the table: Spain and Italy. I had already written about Amazon's potential interest in Esselunga, immediately denied by the owners. However, the news has arrived in these hours. If confirmed, however, it would be a bomb.
AMAZON BETS ON MERCADONA
The Seattle-based company would be finalizing the acquisition of 51% of Mercadona thus automatically becoming the leader in Spain with a 25% stake. The Wall Street Journal wrote it. Jeff Bezos said: “It's not the first chain we've bought, nor will it be the last. Mercadona is a successful model recognized in the world ”. Juan Roig, owner of Mercadona, although sorry for having to throw in the towel, explained the operation as the only way he could find to keep the company competitive. Above all in terms of innovation and digitization ". Change is not within everyone's reach.
DOSSIER FRANCE
In France, after the stop at Couche Tard and the failure of the Moulliez family's first assault on Carrefour, a new attempt immediately after the presidential elections is not ruled out. With Hannibal-Amazon at the gates this time it could be successful by sweeping away the resistance of Alexandre Bompard.
WHAT HAPPENS IN GERMANY
In Germany it is very likely that Aldi will accelerate the integration (merger) project between the two chains (ALDI north and ALDI south) divided since 1961 due to differences in the family. The reason is always the same. Competition and investments to innovate are not within the reach of all brands. Not even the strongest.
THE STRENGTHS OF MERCADONA
Mercadona has strengths that make it unique and appreciated by over 40 million Spanish consumers. First of all, the idea that the goods must travel as little as possible from where they are produced to the point of sale. Big brands aren't central (and that's music for Amazon). Its MDD and every day low price, together with a good quality perceived by the consumer, are the key to its success. And its compatibility with Amazon. Mercadona remains a point of reference for all large-scale distribution operators. As is Esselunga, albeit with a very different cut, in Italy. It is no coincidence that Bernardo Caprotti thought of Mercadona as the only brand capable of acquiring "his" company in order to keep it at the same level. For Amazon, this would be a similar operation to the one completed in the US in 2017 with Whole Foods Market.
THE SIGHTS OF AMAZON
Amazon's goal, then as now, hasn't changed. Making the boundaries between online and offline less and less evident by aiming decisively towards a model that includes both. The unichannel I wrote about recently talking about Carrefour projects in France. Jeff Bezos once again chooses the best on the square and is willing to pay for it. I really don't think it will stop there.
WHAT CHANGES WITH COVID
Covid and the accelerations it caused in the food and non-food distribution business represented an important element of reflection. On the one hand, those who have grasped the acceleration but framed it in a phenomenon destined for a long time, however, for which there is plenty of time to gear up. On the other hand, those who have intuited its explosive power, risks and irreversibility.
THE SCENARIO WITH AMAZON
What is clear is that Amazon aims, in order to grow in physical retail, at the most performing and potentially available brands globally. Don't buy so much to buy. And with us the signs with these characteristics can be counted on the fingers of one hand. And maybe you don't even need all your fingers….
(Extract from an article published on mariosassi.it
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/amazon-mercadona/ on Thu, 30 Dec 2021 06:47:04 +0000.