Cencosud: expanding online and targeting premium opportunities in Peru

Date : 12 December 2017

Cencosud will invest more into the Peruvian market, targeting the online channel and the expansion of its premium format Wong Gourmet.

Targeting a young population online

Cencosud is looking to double its sales through its online grocery channel. This is through attracting new shoppers. It is targeting the population aged between 25 and 40. Online is at an early stage of development in Peru, but Cencosud is keen to lead, building on its experience in other markets such as Chile and Colombia. And this follows the retailer’s recent announcement of further progress in Chile, where its Jumbo hypermarket business now offers delivery within 90 minutes across 12 Santiago municipalities, and where it’s installed drive-thru collection at five of its stores. In Colombia meanwhile its first drive-thru outlet has recently opened, while it’s working with a third-party to grow its online delivery network.

Premium format expansion

Cencosud will also target further premium expansion in Peru. via its Wong Gourmet format, a new, smaller format that focuses on delicatessen style products. Following a recent opening within a Paris department store (also part of Cencosud) it has plans to open up to eight stores in this format. This follows the recent opening in Colombia, of Casino’s first Carulla Freshmarket store, building on a previous development in Uruguay. The store has a greater focus on fresh and aims to differentiate itself through how this is delivered. The Colombian store has a greater focus on organic products, and includes a vegetable garden. (read more about this store here)

Fitting with the wider Cencosud strategy

Cencosud spoke about its online developments at its recent third quarter results, during which it reaffirmed its three core strategic principles of;

• Progress in its value proposition through investments in technology, positive customer experience, and a better product mix.

• Maintaining its focus on efficiency and costs control through changes in processes and store clustering.

• Advancing its omni-channel strategy, with a focus on increasing the proportion of food-sales.

At the same time, Cencosud updated on a mixed performance for its supermarket operations, with total Q3 sales down 1.4% across the division. Chile was a highlight with growth of 4.4% ( LFLs 3.8%), while Argentina’s strong local currency performance was offset by currency effects and Colombia and Brazil were firmly in negative territory. Peru’s LFL performance was positive, but was offset by the closure of two stores and the sale of pharmacies.

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