Grupo Éxito announces its best net sales performance in three years in Colombia

Date : 19 November 2019

Oliver Butterworth

Retail Analyst

Colombian retailer Grupo Éxito, part of the Casino Group, has posted its strongest sales performance of the last three years. In Q3 its net sales reached COP2.67tn (US$779.9m), a quarterly growth of 5.6% (vs. 3.4% in Q2 and 0.6% in Q3 2018). This is the business’s seventh consecutive quarter of net sales and same-store-sales (SSS) growth.

SSS grew by 5.8% in Q3, up from 3.6% in the previous quarter. Éxito said its strong performance was mostly driven by the implementation and solid sales performance of its latest store formats, coupled with strong omnichannel growth.

Innovative store models continue to drive solid sales performance

The Éxito segment of the business continues to be the best performing. Grupo Éxito launched its digitally focused ‘hypermarket of the future’, Éxito WOW in 2018. It has implemented the modern design at eight stores, five of which opened in Q3. The converted stores have seen an impressive sales increase of 15.7%. Grupo Éxito expects to close 2019 with nine stores under the design.

Carulla Fresh Market, Grupo Éxito’s premium, fresh-focused concept has been rolled out at nine stores (three of which opened in Q3). It aims to extend this to 13 stores by the end of 2019. In Q3 stores under the Fresh Market banner saw a sales growth of 14.9%.

Éxito reaches its 2019 target of cash and carry openings

Grupo Éxito converted five stores to its Surtimayorista cash and carry banner in Q3 and has opened 15 over the last 12 months. It has already reached its 2019 target to have 30 stores under the banner in total. The business continues to convert its underperforming Surtimax and Super Inter stores to the banner and the conversions have seen a strong improvement in growth as a result.

Surtimayorista delivered solid sales growth of 17.5% in the quarter and an 18% growth in SSS. Sales for the banner equated to 4.4% of its total revenue in Q3, up from 4.0% in Q2.

Omnichannel sales grow by 30%

Ecommerce sales grew by 30.1% in Q3 and represented 4.4% of the retailer’s total sales. The number of omnichannel deliveries fulfilled in Q3 increased by 27% year-on-year. In the first nine months of 2019, sales made through the Éxito and Carulla websites increased by 18% versus the same period in 2018.

The business has close to 1,500 vendors on its Marketplace and it increased Gross Merchandise Volume by 12.2% in Q3. Click and collect for non-food orders is now available in 254 stores and the number of orders grew by 33.3% in Q3.

Digital transformation shows good progress

New versions of the Éxito and Carulla mobile apps were launched in Q1 2019 and these have now reached over 1.5m downloads. 540,000 customers have registered to the My Discount feature, which helps them save money, whilst helping the business to drive brand loyalty. Grupo Éxito says the average ticket of shoppers using its apps is twice those who do not.

To create a more frictionless shopping experience in-store, Éxito has implemented five self-scan checkouts and enabled 59 stores with shop and go technology.

Outlook for the rest of 2019 and in to 2020

Grupo Éxito’s 2019 target was to open 18 to 20 stores (from openings, conversions and remodels), including at least five Éxito WOW, five Carulla Fresh Market and 10 Surtimayorista stores. The business is on track to meet these opening targets.

In the medium term we expect the business to continue implementing its latest WOW and Carulla Fresh Market formats, which have been successful with shoppers. We also expect it to maintain its expansion of the Surtimayorista banner. Many of these openings will come from conversions and remodels, so we do not anticipate the business strongly growing its store estate, but to evolve its current propositions to better meet changing consumer demand.

We take an in-depth look at the discount channel in Latin America. We focus on key markets, like Brazil, Colombia and Mexico, and the retailers driving growth in the channel, including ara and Bodega Aurrera. We consider the trends supporting the channel's expansion across the region, including private label growth and the targeting of core shoppers, and the implications of the channel's growth on suppliers.

Get the latest industry news and insights straight to your inbox with our range of newsletters.