Supermarket Industry in Spain (Finance)
Over thousands years, Spain has developed a unique gastronomic culture while food has become more and more important for Spanish people. Nowadays, we are looking not only for the best quality but for the best low-priced products as well since the economic crisis affects us all.
The food industry is second only to tourism in its contribution to Spain´s GDP and a major part of Spain´s export market. As a result it has become one of the pillars of recovery and economic drive needed to overcome this crisis. Furthermore, it is a key in order to reduce unemployment, with a positive growth rate by creating direct jobs.
In Spain, supermarkets and hypermarkets rule the food industry, by offering low prices and, apart from food, a wide variety of different products such as clothes, electrical appliances, household goods… almost everything you can need in your daily life.
From a financial point of view, the main characteristics of hypermarkets are thin margins, high volume of sales and big power of financing themselves from suppliers.
Taking an example within the supermarket segment, Mercadona is a 100% Spanish-owned distribution company, representing a 13.1% share of Spain´s total food retail space.
After analyzing the annual report of 2010, we can see in the figures below, approximately 50% of the assets are noncurrent assets what means that the company owns a big amount of tangible assets like land, structures and construction in progress and intangible assets as well, but in a smaller proportion.
Regarding the Current assets is remarkable the treasury of the company since the cash and cash equivalents represent almost 75% of these kind of assets, so, even the current ratio is 0,97 we can assume that the company is not in liquidity troubles.
Moreover, the accounts payment period is about 83 days, which provides the main way of financing thanks to suppliers, as Mercadona accounts collection period is less than 15 days.
Finally, the net profit represents just 2.7% of the net sales, it can seem very small but as we have said before, it is quite normal margin for supermarkets.
Comentarios desactivados en Supermarket Industry in Spain (Finance) /
27 Nov 2011
por
Laura Navas Valle
MIGMAmad /
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