GPA has reported net total store sales for the food business in Q1 grew 9.5% vs. Q1 2016, with continued outstanding growth from Assaí, GPA’s atacarejo format and continuing improvement from its Extra hypermarkets.
Assaí outperformance continues
Assaí stores now account for 38.3% of net sales. With same store growth rising by 12.9% as part of a wider sales uplift of 28.9%, sales of its atacarejo format are its growth engine.
While growth was slower than in previous quarters, a key factor here was the slowdown in inflation. GPA highlighted the increasing footfall in the quarter. with double digit growth in customer traffic.
should drive more Assai growth
With Assaí going from strength to strength, GPA is converting more Extra stores to this format. There are currently five Extra Hiper stores being converted to the Assaí format, due to be finished later this year. A further 15 conversions are expected to start soon.
Broader portfolio optimisation
GPA has been focusing on developing its existing estate.
In Q1 2016 it converted several Minimercado Extra stores to the more premium Minuto Pão de Açúcar banner. Over Q1 2017 there were two new store openings and sixteen closures, though more broadly in 2017 there is a bigger programme of store expansion under way. There have also been 48 new franchise partner additions to the Aliados project, building on the 102 at the start of the quarter. Focus on the proximity format also continues as GPA targets more Minuto Pão de Açúcar openings.
Extra Hiper drives improved Extra growth
Extra Hiper same store sales grew in Q1 by 5.4%, following similar growth in Q4 2016, supported by recent investments in formats and the success of its revamped price communication programme and promotional strategy. Non-food continued its improvements begun in the previous quarter, aided by by in-store mobile initiatives and the Technology Festival campaign.
Overall GPA is confident that Extra is gaining share against its key competitors. Growth at the Extra Super banner was slower, with same store sales growth of 1.0%. GPA will be keen to maintain this progress in Q2 and beyond.