Grupo Éxito’s latest formats drive solid annual performance

Date : 25 February 2020

Oliver Butterworth

Retail Analyst

Grupo Éxito Colombia has reported net sales of COP11tn (US$3,273m) for 2019, a 4.2% growth year-on-year (YoY). This performance is mainly attributed to solid sales from its innovative Wow, FreshMarket and Surtimayorista formats, strong omnichannel growth (+37% YoY) and the opening of 29 new stores. Same-store-sales (SSS) were up 4% YoY, driven by the strong performance of its Éxito banner (where SSS rose 4.9%).

“In Colombia, Grupo Éxito posted the best SSS performance of the last three years, benefited by value formats such as Éxito Wow, Carulla FreshMarket and Surtimayorista,” Carlos Mario Giraldo Moreno, CEO of Grupo Éxito.

Grupo Éxito now operates nine Éxito Wow stores, and 13 Carulla FreshMarkets (including its latest Carulla SmartMarket pilot store). Éxito Wow stores increased sales by 13.4% in 2019 (9.1% in Q4) and Carulla FreshMarket grew theirs by 12.7% (8.2% in Q4). Sales for its Surtimayorista banner grew by 17.8% and represented 4% of total sales in Colombia in 2019 (vs. 2.8% in 2018).

Strong Q4 results

In Q4 net sales grew by 4.9%. The performance of Éxito Wow, Carulla FreshMarket and Surtimayorista accounted for 2.5% of this. Q4 sales were also supported by strong omnichannel growth of 20%. Stores under the Éxito banner delivered their sixth consecutive quarter of SSS growth, reaching 5.2%.

Store openings surpassed expectations in 2019

Grupo Éxito surpassed its target of opening between 18 and 20 stores in 2019 by adding 29 (four in Q4). The new stores were a combination of organic openings and conversions. Its openings consisted of 12 Surtimayorista (all conversions), seven Éxito Wow, two Éxito Express, one Éxito Supermarket and seven Carulla Fresh. It also reached its target of operating 30 Surtimayorista stores (in total) by the end of 2019.

Expansion set to continue in 2020

The business aims to open between 20 and 24 stores in 2020, a slight increase on its target for 2019. Again, this will be a mix of new openings and conversions and Surtimayorista will be its fastest growing banner. It said openings will consist of six to seven Éxito Wow, six to seven Carulla FreshMarket, and between eight and 10 Surtimayorista stores. It hopes to generate 50% of its total revenue in 2020 from these three banners plus omnichannel sales.

Omnichannel sales grew 37% in 2019

Omnichannel sales grew by 37% in 2019 and by 20% in Q4. Sales through exito.com and carulla.com increased by 17% in 2019. It re-launched its Éxito and Carulla apps in Q1 2019 and these have reached close to 1.9m downloads. Over 690,000 have used the apps’ My Discount feature.

The number of deliveries fulfilled by the business increased by 56% YoY. It now has over 1,100 vendors on its marketplace and gross merchandise volumes grew by 29%. Click and collect orders grew by 25% in 2019 and the service is now available in 254 stores (non-food order collection). Last mile and home deliveries grew by 56%, benefiting from its alliance with third-party deliverer Rappi.

Increased technology in stores

Grupo Éxito has implemented more technology, which is aimed at making payment frictionless in 33 stores. This includes self-checkouts, scan & pay and shop & go technology. Its latest and most forward-thinking store, Carulla SmartMarket, located in the capital city Bogotá, exhibits over 20 pieces of technology aimed at enhancing the shopping experience, including simplified payment solutions.

Taeq private label grows sales by 25%

Sales of its health-focused private label Taeq grew by 25% in 2019. It says Taeq is ranked the fourth most important health brand in the market. Private label sales represent approximately 25% of its total food sales. The business is leveraging its Frescampo label to promote competitively low prices, which will be key in competing with discounters in Colombia.  

Grupo Éxito sells shares in GPA to simplify LatAm business

In Q2 French retail group Casino announced plans to restructure its Latin American operations, which Grupo Éxito and Brazil-based GPA are part of. This was approved at the Extraordinary General Shareholders’ Meeting held on September 12, 2019. Éxito sold its shares in GPA to Casino for US$1,161m.

 

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