Leaving Catalonia? A thorny terrain for Catalan supermarkets

Barcelona"Leave Catalonia? No, and now!" This is often the response given over the years by several Catalan supermarket managers when asked if they intended to go out and see the world, or at least to expand their business in the rest of Spain. The distribution sector—and, above all, the food sector—is often closely tied to its territory, with zero-mile policies, values, and proximity that make it difficult to leave the region that protects them. Furthermore, well-known brands are often tied to a specific territory, which can generate hostility when trying to break into the market.

"All supermarkets find it difficult to cross borders, not just the Catalan ones," notes IESE professor and senior management consultant Miquel Lladó. "Tesco failed when it tried to launch in the US and Japan; the American Walmart failed in Germany; even Mercadona has only made a very timid appearance in Portugal," the expert explains. "We see Lidl more, which is a German chain, but it's not a leader outside its own country." In fact, "food is deeply local, and logistics is also a very important aspect; there are well-established local businesses, and competition is very strong," he explains. "That's why Caprabo, when it launched in Madrid, had to be partially bought by Eroski."

In fact, the example of Caprabo is the most paradigmatic. When the Catalan chain was acquired by the Eroski group in 2007, Caprabo had around 600 stores across Spain. Eroski wanted Caprabo to enter the Catalan market, and the policy was to merge the Caprabo stores outside Catalonia with the existing Eroski stores, and to maintain the Caprabo brand only in Catalonia. "Since then, the strategy has been to focus on our roots, on our strategic market, which is Catalonia," explains Caprabo. In 2021, after years of debt, Eroski sought a partner for Caprabo, selling 50% of its stake to the Czech holding company EP Corporate Group. Since then, Caprabo's policy has been the same: regain space in Catalonia and stay there.

"We are the oldest supermarket in Catalonia and Spain, and ultimately, the brand has the strongest presence in Catalonia, mainly due to its values, proximity, the idea of small, neighborhood supermarkets, and trust," Caprabo explains. "That's why the brand's business was concentrated in Catalonia and not in the country. Its 2024-2026 strategic plan calls for around 15 new openings per year in Catalonia alone, and Caprabo currently has more than 300 stores in the Principality and three in Andorra."

Adapt the model

The exit strategy, if desired, can involve joining a larger group or even changing the brand name in stores abroad. According to Ana Isabel Jiménez Zarco, professor of economics and business studies at the UOC, when it comes to stores with strong roots, expanding abroad is complicated: "When they are supermarkets with very local products or with a brand closely tied to the region, it's more complicated, and the landing can't be the same." In this sense, the professor points out that often "you have to change suppliers, or even your name."

"There's also the issue that the brand is very closely linked to Catalan or Catalonia: it's hardly recognizable abroad, and sometimes it's interesting to adapt the name or brand to the language of the people who will be buying," explains Jiménez. In this way, "it continues to maintain the strength of the parent brand, but with a new brand in that territory: it can have its own products, a section of Catalan products, but at the same time it also has room for innovation. For example, in the case of calçots, it's difficult to sell them abroad; the offer has to be adapted to the environment," explains the professor.

Bon Preu, on the other hand, is a special case. Its owner, Joan Font, has repeated dozens of times that "leaving Catalonia is not on the table." interview with ARA two years ago Font explained that opening a supermarket in Spain is not the same as doing so in Catalonia: "There are slight differences. We have some products outside of Catalonia, but we have to adapt the model," he said, along the lines suggested by Jiménez. In fact, Bon Preu has four supermarkets in Aragon outside of Catalonia, but under the Orangután brand, which at first glance is not recognizable as part of the group.

When asked about this fact, company sources explain that "these stores were purchased under the Orangutan brand at the time, and the name they had was maintained, but they are not treated as a Bonpreu Esclat store." They also reiterated that "there is currently no operation on the table to expand abroad, neither open nor under study," although they do not rule out doing so if "a good option" arises.

Politics and boycott

In the case of Catalonia, the political dimension associated with the region cannot be ignored. "Obviously, with the whole Process issue, Catalan identity can have positive and negative aspects," Lladó points out. "Territorial roots are not scalable; it's not like having a technology and exporting it to the entire world, because you're exporting values." Ana Isabel Jiménez points out the same thing: "Everything is contaminated, and when there's a political problem or a boycott, the brand is the one who pays for it," she asserts.

All in all, "any supermarket brand, when it begins to expand outside its area of influence, starts in neighboring areas," the professor explains; areas that have similarities with its territory of origin, be it the language or culinary customs. For this reason, it's also not unusual for companies that claim they have no interest in entering the Spanish market, as is the case with Ametller Origen, to have made the move to Andorra. "We are currently focused on opening and renovating stores in Catalonia, where we believe we still have new customers to reach," explains Fernando Oteiza, general manager of operations for the Ametller Origen group. "Andorra is a very interesting case: it's a market very similar to ours and is the only one we've chosen to enter with a local partner, given its unique characteristics," Oteiza explains. Ametller Origen currently has 146 stores, three of them in Andorra.

The case is similar with Plusfresc. The company was founded in 1929 in Lleida by Rafael Pujol Sala and is currently led by the third generation of the family. "This is something that permeates our mission, vision, and values, and defines our business line and expansion strategy," explains Francisco González, CEO of Plusfresc. "Lleida remains our priority, and it is here that we are leaders in market share of commercial space, and where we have established deep roots thanks to collaboration with local suppliers for more than thirty years," he explains.

In this sense, he states that its objective is "to grow within Catalonia," reinforcing its presence "without losing sight of the essence based on proximity and local products as a synonym for quality." Along the same lines, González asserts that "any expansion outside of Catalonia, into the rest of Spain, would require a rethinking of the business model," a scenario they are not currently considering, the executive asserts. "However, we currently have two stores in Aragon, specifically in Mequinenza and Nonasp, two towns we are committed to due to their proximity to Catalonia," he points out.

The exceptions

As with everything, there are exceptions. Veritas, for example, decided years ago to open a market throughout Spain, despite having its origins in Catalonia. In fact, this year, the eco-friendly chain plans to invest €6 million in new openings. In addition to the new supermarket in Campos (Mallorca), opened last January, the company plans to make seven new openings by the end of the year, spread across Catalonia, Andalusia, the Balearic Islands, the Basque Country, and Madrid. The fact is that Veritas's distinguishing feature is not so much its origins and roots, but rather its ecological appeal. Despite being owned by one of Caprabo's former shareholders, Silvio Elías, Veritas has managed to embody its brand with an ecological theme rather than a territorial one, and this characteristic is more transferable between autonomous communities. "Veritas is not so much tied to identity; it is tied to an ecological proposition; it is unique in this, in the market," Lladó points out.

Something similar is happening with BonÀrea. The company, known primarily for its meat products, opened its 600th store this week. It has 451 stores in Catalonia, with Aragon being the second-largest region, with a total of 89 establishments. However, BonÀrea also has a presence in Castellón, Valencia, Madrid, Navarra, La Rioja, Guadalajara, and Andorra. "Being so closely linked to a specific, more specialized product like meat has allowed it to build a very positive image outside its home," explains professor Ana Isabel Jiménez. However, Jiménez is clear: "Be that as it may, people ultimately end up buying wherever there is a good product, reasonable prices, and good service."