Justo & Bueno was launched in Bogotá, Colombia in February 2016 and in December 2019 celebrated opening its 1,000th store in the market. The business is set to enter Chile in 2020, which will be its third market in Latin America. It also operates around 100 stores in Panama, where it continues to expand its presence.
Background to Justo & Bueno
In 2009 Michel Olmi, CEO of Reve Group, which owns Justo & Bueno, launched the Colombian discounter D1 (one of Justo & Bueno’s main competitors), which now has over 1,200 stores. Olmi sold D1 to launch Justo & Bueno.
Although also a hard discounter, Justo & Bueno differentiates itself from D1 by having a larger footprint, which enables it to offer a selection of fruit and vegetables. The look and feel of Justo & Bueno is also more colourful, which creates a more pleasant environment for shoppers.
||Source: IGD Research
Olmi said his medium-term goal is for Justo & Bueno is to become the largest low-cost chain in Latin America. If the business maintains its aggressive expansion, we expect it to become the market leader in Colombia over the next three years.
Historic performance demonstrates huge growth potential in new markets…
In just over three years Justo & Bueno has opened 1,000 stores in Colombia and has quickly become the second biggest discounter in the market. In 2019 it registered sales growth of 57%. These factors demonstrate how quickly the business is growing and could expand in new markets. For more information on the rapid growth of the discounters in Colombia, see our article here.
Justo & Bueno wants to strengthen its presence in municipalities where it already has stores, as well as expanding into new ones. When asked about what the business achieved in 2019 and prospects for 2020 Olmi said “we like to think that this is only the beginning…we are convinced that 2020 will be a great year, because in addition to opening stores, we will continue to strengthen and consolidate ourselves as a large family and as a chain."
…backed by heavy investment
It was recently announced that private equity fund Australis Partners (an American independent investment firm that manages private equity funds), along with other partners, has agreed to invest US$18.4m in Reve Group. This gives the business huge spending power and the opportunity to expand in all the markets it operates in.
A new proposition for Chile…
Justo & Bueno’s proposition follows the hard discount model, an unexplored proposition in Chile. The model is centred on selling high volume products at low cost. The stores are operated with minimal staff (an average of six per store), so in order to speed up the replenishment process most products are sold directly out of boxes. It offers a variety of national and imported products, including many private labels. Justo & Bueno’s (Fair & Good) core principle is offering customers good quality products at fair prices.
“The country changed the day we brought the discount model to Colombia. This model democratises consumption. There is room for everyone, competition is healthy and the most important thing is that the beneficiary has been and will continue to be the consumer.” Michel Olmi.
For a deeper look at how Justo & Bueno's entry into Chile could disrupt the grocery market, see our article here.
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.
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