Juan Roig, president of Spanish supermarket chain Mercadona, said on Tuesday against setting price ceilings on certain products to limit the impact of inflation, ensuring that it is an “illusion”.
“This is an illusion. We depend on supply and demand, and nothing can determine the prices of products, only the market. I find it impossible to fix prices. It’s like saying that water does not get wet,” the businessman said during the presentation of Mercadona results. for 2022, which took place this morning in Valencia.
According to the businessman, the “artificial” establishment of price ceilings for individual goods over time “is compensated [aumentos de preços em] other products” or this will happen “by reducing the quality of the products or by reducing the size of the packages”.
“It is impossible to block prices. But we will fight to lower prices,” he assured, admitting that “nothing foreshadowed” that inflation would reach current levels.
In this regard, Juan Roig stated that the “key factors” of Mercadona’s strategy to not pass the full cost impact on the selling price of products were margin reduction, cost control, productivity improvements (up 7% compared to 2021) and providing an “effective assortment”.
According to him, the impact of the cost increase reduced the company’s margin by 0.6 points, and profitability reached “one of the lowest values in its history: 0.025 euros in profit for every euro sold, compared with 0.027 euros in 2021.” “.
Pointing to “average PVP increase [Preço de Venda ao Público] by about 10% in 2022,” Mercadona added that “joint efforts to contain the impact of cost in the consumer basket, […]more than 375 million euros was saved thanks to cost efficiency and productivity.”
“During March, we reduced prices on more than 157 products and will continue to try to reduce costs in order to lower selling prices for the population in the basket,” said Juan Roig.
In his speech, President Mercadona also highlighted the central contribution of “decent” entrepreneurs to wealth creation in the country, demystifying the idea that “making a profit is bad.”
“Making a profit is essential. But if the only goal is to make money, that’s no good. You must share them with the whole society, with workers, suppliers, shareholders. But if there is no profit, you cannot reinvest, expand and maintain the company. This message must be conveyed to society,” he said.
Author: Portuguese
Source: CM Jornal
I’m Tifany Hawkins, a professional journalist with years of experience in news reporting. I currently work for a prominent news website and write articles for 24NewsReporters as an author. My primary focus is on economy-related stories, though I am also experienced in several other areas of journalism.