Walmart launches new Express banner in Mexico

Date : 17 November 2020

Oliver Butterworth

Retail Analyst

Walmex has launched an innovative new supermarket banner in Mexico. Its first Walmart Express store opened November 5 in Lomas del Valle, in the city of Puebla. With an initial investment of MXN1.3 bn (US64m), the business plans to convert existing Superama supermarkets to the new format, as well as opening new stores.

Source: Walmex

Stores will be a mix of conversions and new stores

Walmex operates 93 stores under the Superama banner and these will all be converted to Walmart Express. It will update three stores (all in Mexico City) in 2020 and these are expected to open towards the end of November. The remaining 90 will be converted in 2021.

The pilot store in Puebla is one of two new openings planned for 2020. The second store will open in the city of Mérida, also in late November. Walmex plans to open five new stores in 2021, in addition to the refitting of the existing sites. The business is expected to provide further details about its future expansion plans in February/March 2021.

A new strategic direction for the Express banner

Walmex has three strategic pillars it is aiming to meet with the new banner, which are closely aligned to customers’ needs:

  1. Quality at low prices

Walmex is committed to offering everyday low prices (EDLP) and this is a key part of the strategy for Express. Its aim is to continue to offer the same quality products as Superama, but with greater value.

Source: Walmex

The stores will retain some of Superama’s most popular products and premium lines, including its wine and bakery ranges. In most other categories, though, the prices will be more aligned to those in Walmart’s Supercenters (hypermarkets).

This will give customers the best of both worlds, if they want premium products, these are still available, while shoppers’ everyday purchases will become more affordable. This should help to broaden the brands’ appeal to more customers and help it to meet more shopper missions.

  1. Proximity

Another key focus for the Express format is proximity to customers, a strength of the existing Superama stores. The banner occupies many of the best strategic locations in the centre of Mexico, particularly in Mexico City. For new openings, Walmex will be targeting similar sized units, between 1,000 and 2,500 sq. m, that are close to the customer.

  1. Omnichannel

Walmex said omnichannel is the most important of its three strategic pillars. The latest initiatives give customers greater flexibility over how and when they process and collect online orders. Shoppers will be able to purchase products via Walmex’s websites or apps and opt for one of home delivery, collection in-store (now on foot at the new PickUp desk) or collect in their car, from designated areas in the stores’ car park.

The new PickUp counter enables customers to collect online orders in store and pay for these items in cash. This is a key development, as some Mexicans do not have bank accounts, whilst others do not own cars to enable them to use the other type of PickUp service.

Walmex will continue to develop its external car PickUp areas, which allow customers to collect orders without leaving their cars. Larger stores will feature drive-through style collection points, while smaller stores will have designated parking bays where orders will be brought to them.

Plans to open stores in new cities and states

Walmex operates Superama stores in 16 states, but most of its stores are in Mexico City. In a recent press release it said new stores “will be located in strategic points of the country, to reach new spaces where there is no presence with the current formats”.

Leveraging the Walmart brand

Superama is well known in the country’s central areas, including Mexico City, but less so outside of these places. The Walmart brand is more powerful and widely recognised than Superama, due to the presence of Walmart Supercenters in 32 states. Mexicans also associate the Walmart brand with quality, making it a desirable place to shop.

In some areas of the country, e.g. the south east, Superama stores are called ‘Superama by Walmart’ to help customers make the connection. The Walmart Express banner will instantly resonate with customers, which will be important as Walmex starts to expand into new states.

Supermarkets more desirable than ever

Since the start of the pandemic customers have preferred to shop at smaller supermarkets. Size, along with proximity, have become more important drivers of store choice. In addition, ecommerce sales grew at an unprecedented rate as consumers were encouraged to stay at home. Walmart Express is well positioned to capitalise on these changes in consumption habits in the short term and help the retailer build a stronger position for the long term too.

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