BUSINESS
March 22nd - April 4th 2023
Getting richer
INDITEX - the world's biggest fashion retailer - posted a 27% rise in net profits last year as sales exceeded pre-pandemic levels. Net income soared to a record €4.1 billion in results covering the first full year that Marta Ortega, daughter of Inditex founder Armancio Ortega, took over running the company. In-store and online sales reached €32.6 billion - 18% more than the €27.71 billion posted last year and 15% higher than in 2019, before the Covid pandemic struck. The positive figures come despite Inditex closing and then selling off its 514 stores in Russia - its biggest market outside Spain - following last year's invasion of Ukraine.
THE value of Spanish pension scheme assets fell by €482 million to €82 billion in February 2023, according to new data. Following an increase in asset values in January, a more ‘challenging market environment’ caused the drop last month, according to pension advisory organisation Inverco. But Inverco suggested that projected returns in the medium to long term for individual schemes were positive.
Falling value “For example, at 26 years, the pension schemes will register an average annual return of 2.5% while at 10 and 15 years it is estimated that the return will be 2.6% and 2% respectively,” a spokesperson said. Benefits paid out during the month totalled €207m compared to contributions of €115m.
RECORD HIGH
FOOD and non-alcoholic beverages rose in February by 16.6% over 12 months - 1.2% higher than in January. The food inflation rate, according to the National Institute of Statistics, is at its highest point since it
Price rises continue as food inflations hit peak By Alex Trelinski
started using the current measuring system in 1994. The peak in the current
PROFITS UP
MERCADONA has reported that profits rose 5% last year as consumers had to deal with increased prices. The company made €718 million in 2022 - up from €680 million the previous year. Mercadona president and main shareholder, Juan Roig, said that €161 million in dividends had been paid out and in ‘the interests of transparency’, he declared his annual salary as €11 million. On rising food prices, Juan Roig said his business had cut profit margins by 0.6% to help customers.
During 2022, Mercadona opened 63 new stores to reach 1,676 establishments in total across Spain and Portugal.
economic crisis was 15.7% in December with this year’s IVA tax cuts on basic food essentials being quickly swallowed up by rising prices. Increased fresh food costs for vegetables, fruits, and legumes are behind the rise due to supply issues caused by weather conditions in Spain and in other EU countries, and the resulting increase in international demand. Last month, Agriculture Minister Luis Planas said there were ‘reasons to believe that food inflation had peaked’, but clearly that is not the case, with added pressure now on the government to do more. Among some of the biggest rises over 12 months,
there’s sugar (52.6%), butter (39.1%), sauces and condiments (33.8%), olive oil (33.5%) and whole milk (33.2%). Food inflation has been in double digits for 11 months in a row and Spain’[s problems are mirrored elsewhere in Europe.
Farmers
For example, Germany’s rate for February was 21.8% Rising prices have been caused by farmers having to pay more for basic items like seeds, feed, fertilisers, electricity or fuel, but experts believe with those rates now falling, reductions will start to be passed on through the food chain.
23
Car factory layoffs FORD has announced 1,100 job losses - 20% of its workforce - at its Almussafes car plant in Valencia. The news follows last month’s announcement of 3,800 job cuts elsewhere in Europe, including 1,300 posts in the UK. Last year, Ford said it was delaying production investments in Spain, citing a ‘revised outlook for Europe’, but emphasised that it was moving forward with plans to start producing electric vehicles later this decade at Almussafes. Production of the S-Max and Galaxy models will cease next month at Almussafes as Ford moves to manufacturing only electric passenger cars by 2030. It means that only the Kuga SUV will be made at Almussafes until 2025, when the new GE2 electric car starts rolling off production lines.