Amidst a raft of recent retailer activity, we take a closer look at how the convenience channel is expanding in Chile.
Shopping more frequently for smaller purchases
Walmart and SMU have both spoken about recent changes in shopping habits across Chile, as customers shop with greater frequency, and in smaller stores. This is being driven by changing lifestyles, and follows trends experienced in many markets around the world. Bearing in mind the current focus of many convenience stores in Chile lies around instant consumption needs, there feels to be a huge opportunity to expand the role of convenience stores, especially within the fresh category, and in meeting needs for the next 24 hours and potentially beyond. Walmart in particular has spoken about how it will boost fresh ranges, putting it in a stronger position to exploit this opportunity.
Big John being converted to Oxxo
FEMSA, operator of the prolific Oxxo chain in Mexico, recently purchased Big John, a local operator of convenience stores in Chile. Big John has around 50 stores that are primarily located in and around Santiago, and has recently completed the first conversion to an Oxxo store. It will need to work hard however to build the brand in Chile, a market in which its brand presence is very low, in stark contrast to its domestic Mexican market. Once the remaining conversions are completed, due by August, it will be in a better position to grow brand awareness. FEMSA has said that despite feeling like they are still learning about the Chilean market place, it expects the mini-market sector to grow. What Oxxo will no doubt be keen to prioritise is aligning its offer to meet Chilean shoppers' needs. Alongside this, it has also acquired a pharmacy chain in Chile, and will no doubt look to exploit synergies.
Walmart remodels Ekono brand
The CEO of Walmart Chile (Lider) confirmed recently that Walmart would continue to invest in Chile. As part of Walmart’s plan to make its existing portfolio more profitable it has closed supermarket stores, and is remodelling its Ekono brand, traditionally more discount focused, into convenience stores. It will keep the same low-price strategy as in previous stores. It also plans to have a stronger focus on fresh.
SMU resumes focus on its convenience format
SMU has announced as part of its three-year plan, that it will resume the volume of openings in its OK convenience store format. Having recently prioritised upgrading its Unimarc supermarket estate, SMU is responded to the growing demand for convenience by extending opening hours and expanding extensively across Santiago, Coquimbo and Valparaiso.
Cencosud tests convenience in other Latin American markets
Cencosud has recently opened its first convenience stores in Argentina, which could be a precursor to wider convenience development, including in Chile. However, for now, for Cencosud the expansion focus has been on opening more medium sized formats to reach new catchments in Chile, seeking to meet smaller missions this way.