Currency volatility and reduced consumer spend have proved challenging for Chile-based Cencosud, who appointed a new CEO and new regional business leaders during Q3. We dive further into the retailers Q3’s results and its performance in all its markets.
The currency depreciation of the Argentine peso and Brazilian real against the Chilean peso have been the biggest contributing factor to an -8.1% revenue decline in Q3.
Snapshot of Q3’s results
- Supermarket revenue decreased by -8.1% as reported
- At a constant exchange rate revenue increased +8%
- Chile’s year-on-year was +3.6% in Same Store Sales (SSS). In Chile increased revenues were driven by increased online sales and the net opening of six supermarkets
- Argentina’s year-on-year was +25.6% (SSS). In Argentina revenue heavily declined due to the depreciation of the Argentine peso against the Chilean peso. As of 3Q2018, the application of the IAS 29 now places Argentina as a hyperinflationary economy
- Brazil’s year-on-year was -1.6% (SSS). The depreciation of the Brazilian real against the Chilean peso, the closure of four stores and lower footfall during the World Cup all contributed to Brazil’s decline in revenue
- Peru’s year-on-year was +2% (SSS). Peru’s revenue increased year-on-year due to the appreciation of its currency against Chilean peso, a third consecutive period of increased footfall and the net opening of three new stores
- Colombia’s year-on-year was -2.9% (SSS). Revenues decreased despite the appreciation of the Colombian peso against the Chilean peso. This decrease is attributed to a year-on-year decline in same store sales and two store closures
Continuing to expand the ecommerce offer
Cencosud’s ecommerce arm has shown continuous year-on-year growth and increased penetration, with an encouraging set of results and an increased number of customers beginning to explore the channel.
Progress in Q3
- Online channel sales increased +24.1% at constant currency
- Reached +2.5% penetration for total retail sales compared to 1.8% in 2017Q3
- New Jumbo websites have gone live in Chile and Argentina
- The “Jumbo Ahora” express service has been well received by customers
- Food picking from stores doubled in Columbia and Drive Thru online collection services were added in a further two stores