Valencia-based Mercadona To Increase Wages Because Of The Rise In Inflation

On the frontline of battling inflation, Mercadona is to increase wages for all employees by 5% from January 2022. Eugene Costello and Daniel Hazelhoff report…

Mercadona is one the first big Spanish companies to take measures to ensure its staff do not suffer a rise in their cost of living . So, Mercadona is to increase wages by 5% from January.

Mercadona is Spain’s leading supermarket in terms of market share (25%). It is also one of Spain’s largest employers, with some 1,600 physical stores. In addition, says El Economista, the Spanish business and finance newspaper, it is Spain’s largest company in terms of turnover. 

Valencia Life’s Supermarket Sweep found Mercadona placed first in affordability for consumers. This came after comparing a typical weekly shopping basket across four different supermarket brands.

Juan Roig’s company will increase wages by 1 January 2022 to combat inflation. Mercadona has put this strategy in place to combat the foreseen rise in the IPC (Consumption Price Index). The measure aims to maintain Mercadona employees’ buying power.

“Once we know the final figures of the IPC, we will proceed to apply our changes,” says a Mercadona spokesperson. “This means that our workers will not lose any buying power.”

However, according to the INE (National Institute of Statistics), the ICP rose 0.4% from October to November. This placed the interannual rate at 5.6%. That leaves the IPC at two decimals above the rate in October. It put the IPC at its highest rate in 29 years. This is mostly due to the increase in food prices, and that of fuel.

November’s data shows that the IPC is at its highest point since 1992, according to El Confidencial.

Mercadona is to increase wages from January

They currently employ more than 93,000 workers in Spain and has long had a socially responsible image. The supermarket reportedly pays employees around 21% above the Spanish minimum wage (€965), which stands at €1,108 gross a month. Employees that have been with Mercadona for more than four years, it reaches 63% above minimum wage, says El Español. 

During the pandemic, Mercadona also added bonuses to salaries. The chain distributed a total of €409m to their employees across the 2020 financial year. 

Employees from other companies might typically see a 1.46% increase in their wages. That’s a far cry from what’s needed to retain purchasing power. This 1.46% is below Acuerdo Interconfederal para el Empleo y Negociación Colectiva guidelines, says El Confidencial.  

These numbers will probably change as we approach the end of the year. Mercadona, however, is heralding a more sustainable direction concerning wages and employee purchasing power. 

Will we see other Spanish companies grab the reins and follow Mercadona’s example? It appears unlikely, but Mercadona is leading the way. Full credit to Juan Roig and Mercadona.