Spain's food, beverages and tobacco stores are rebounding from the pandemic in areas with strong economic activity like Madrid.
The evolution for the country's market overall remained stable in 2022, below 2019 levels, because regions with negative demographics like Extremadura have had a continued decrease in the number of establishments over the past decade.
Convenience, differentiation and sustainability are reshaping the food distribution sector.
The main distribution groups are investing in employment, energy efficiency and construction, while increasing their store network in the main metropolitan locations.
Market leader Mercadona closed 2022 with a network of 1,637 stores nationwide, four more than in the previous year, after 53 openings and 49 closures. For 2023, the company plans to open 58 stores, a figure which, depending on the number of closures, will bring the number of stores close to the target ceiling of 1,700 stores.
Carrefour, after the strong growth of its commercial network with 321 net openings between 2019 and 2022, has reached 1470 stores in Spain, a number that remains stable so far in 2023.
While the market leaders are likely to stabilise their store networks, and despite cost pressure causing operators to rethink their strategies, German supermarket chain Aldi plans to accelerate its expansion this year by opening of 50 stores. In March, Aldi launched its 400th store in Spain. Four autonomous regions (Madrid, Catalonia, Andalucia and Valencia) will have almost half of the growth expected for 2023, while the group will open for the first time in the autonomous city of Melilla on the African coast.
The food and grocery sector is showing resilience and is likely to be more protected against consumer cutbacks. Discounted stores are set to benefit from consumers' increased price sensitivity amid high inflation.
The sector has maintained its attractiveness as a safe and stable investment, following the trend of the past years when several supermarket portfolio transactions took place through the sale-and-leaseback format.
MDSR Investments has been especially active in the Spanish market. The Israel fund acquired 27 Mercadona supermarkets in 2021 and continued to strengthen its portfolio in 2022 by buying four Carrefour supermarkets to Barings for €27 million and a portfolio of nine Carrefour centres, five of them in Spain, to Amundi for €180 million euros.
The Spanish market continues to attract international capital in 2023. Among the latest transactions is the acquisition of eight Carrefour supermarkets by Inter Gestion Reim on behalf of its French société civile de placement immobilier vehicle, Cristal Rent, for €43 million. A new triple net lease, with a firm 10-year term, has been negotiated with Carrefour. This is the first investment transaction for the SCPI, which is somewhat similar to a real estate investment trust, outside the French market.