Mercadona’s commitment to e-commerce -The expansion of its online operations with the addition of two new logistics centers in 2022 and the development of two new logistics solutions.

E-commerce has become a big part of our life in the last years, it has flourished since the start of the epidemic and it is currently in its golden era. Throughout this time, all businesses, particularly smaller ones, have had to adapt in leaps and bounds to processes that, in most cases, were unfamiliar to them but have become critical to their existence. The impact of this new trend has been so significant that it will no longer be considered an adaptation technique for the circumstance we found ourselves in during the epidemic; instead, e-commerce will become a permanent business strategy.

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Among the major advantages of implementing this new strategy could be the capability or reaching a much wider audience and ability to sell/buy all over the world, availability of products at any time without time restrictions, cost reductions largely due to the absence of the need for physical establishments, or even learning about the buying habits of target customers thanks to big data tools in order to increase revenues and strengthen the relationships with consumers.

In 2016, Mercadona decided to relaunch its online shopping business. To accomplish so, it began developing and implementing the Hives model, which consists of warehouses that are solely dedicated to online orders with the goal of optimizing and speeding up both their preparation and delivery, resulting in an increased productivity and time savings. This well-known grocery company has recently announced that it would expand its e-commerce logistics with the opening of two additional logistics centers in Spain, one situated in the city of Seville and the other one in Alicante.

Mercadona Hive in Valencia (Image source: https://elpais.com)

The firm currently operates three distribution centers in Barcelona, Valencia and Madrid, the last of which was established in April 2020 and where online sales were temporarily halted owing to overcrowding during the confinement. According to its 2021 annual report, Mercadona Online has managed to consolidate itself, increasing its sales to 257 million euros during this year. This figure represents a 45 percent increase over the previous year. In addition, the company has increased its number of orders to 1,8 million, up from 1,2 million in 2020.

With the aim of improving its logistics chain and in order to bring the company closer to low density areas, the company has begun to develop two new solutions. The first one named as New Teleshopping, which is currently being tested in Castellón and Tarragona. ‘Customers near these supermarkets place their orders on the revamped website or the mobile application and they are prepared and sent from the stores using the same processes and technologies as in the Hives, which reduces preparation time, makes better use of physical resources and reduces strain on employees’  states the company. An the second one known as Honeycomb, being tested in a store in Gandía (Valencia) which pretends to cooperate with the Hives. ‘Orders are prepared in the Valencia Hive and taken by trailer to this store in the region of La Safor so that the Mercadona Online delivery staff can pick them up and deliver them to the bosses’ as they called their customers.

What steps will Mercadona follow next? Will e-commerce continue to be an important pillar for the expansion of the company?

Mercadona sustainable logistics

Based on the Environmental Management System and Circular Economy, Mercadona includes respect for the environment and dedicates more and more efforts towards reducing the environmental impact of its activity, to manufacture more with less resources, promoting the Circular Economy in its processes.

Mercadona has been working for more than 25 years with his logistic totaler supplier Logifruit, with whom have consolidated a sustainable model based on the optimization of resources. One of the main reasons to succeed in is the launched of the plastic pallet and the folding box which are sanitizable, reusable and recyclable.

A clear example of this resource’s optimization is the replacement of rigid boxes by folding boxes which have meant benefits for the whole supply chain. In the space occupied by a rigid box, three folding boxes are transported now. That’s mean a decrease of 96.710 trucks trips, less fuel used and carbon dioxide emissions into the atmosphere.

Mercadona bet for this circular economy model where the design and resources used allow that pallet and boxes to be finish many circles. From the raw material supplier to the store. You can also add its cleanliness, easy repair and recyclability of these modular designs.

After each cycle of use, each pallet or box return to the warehouse and begin an automated cleaning and disinfection process that guarantees safety and hygiene. After a few minutes they are available to start a new cycle. This way of working allows Mercadona a highly raw material exploitation and work for a “zero residue” program.

The reutilization of these boxes and pallets avoids the usage of 180.000 tons a year of one-use materials. They also improve the transportation and storage costs which help to a competitive price strategy.

Reverse logistics

This process also works due to the reverse logistics and the “Eight strategy”, which main objective is not to transport “air”, that means that trucks do not travel with empty loads.

Trucks carry the used containers to a centre where they are inspected and fixed if it is necessary.  After a few minutes, containers are ready to return to suppliers or stores.