Cencosud’s Q2: stronger sales and more omnichannel focus

Date : 10 October 2017

Cencosud has seen an improved performance in Q2 2017. This is despite slow economic activity in the region. Here we assess what is happening in each market, and take a closer look at Cencosud’s future focus on e-commerce.

Total year on year revenue results

• Cencosud overall business +3.2%

• Supermarkets overall +1.9%

• Argentina +5.0%

• Chile +3.9%

• Brazil +1.0%

• Peru -3.0%

• Colombia -3.5%

In Argentina Cencosud has reported increased competition from the informal market and wholesale formats. Private label has been particularly successful this year and Cencosud is now planning to expand the range further.

In Chile, although economic growth has not reached previous expectations, the market remains resilient and healthy. Cencosud has focused on increasing its promotional activity as a point of differentiation from competitors.

In Brazil growth is expected to resume with the recession predicted to end in 2018. It has looked to strengthen its presence with niche and trend categories, such as healthier products. Organic products and ready-to-eat have also been areas of focus.

In Peru Cencosud has focused on making the shopper journey as convenient as possible. This has involved implementing self-scanning in 11 Metros and one Wong store.

In Colombia Cencosud has felt intense competition, in particular from hard discount but also from convenience stores.

The future is omnichannel

Cencosud’s plans centre around its omnichannel proposition. It is looking to increase flexibility for shoppers. This includes more delivery options, better stock availability, and multiple payment types. It is looking to improve the service on all platforms, particularly mobile. In 2019 it wants to develop greater personalisation across its omnichannel functions.

Omnichannel gaining momentum across key markets

In Argentina Cencosud now offers delivery with an express service of two hours, click and collect and drive-thru. It plans on opening a dark store in 2019 in Buenos Aires.

In Chile home delivery coverage has increased from 42% to 68% of the country. The number of SKUs offered online has also doubled to 20,400, which is 88% of the overall store based range.

In Colombia it has added a greater range of goods, with an extra 22,000 SKUs to the service in the last year. Visits to the site increased by 72% compared to 2016.

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