Latin America: key retail developments in Q1

Date : 20 April 2016

In this update, we look at what happened at retailers across the region in the first quarter of 2016, including results, expansion plans, new formats and restructuring.

Good start to 2016

  • Grupo Éxito's growth accelerated, powered mainly by Colombia's positive economic environment. We look at how it plans to grow
  • For Carrefour, like-for-like sales were up 9.9% in Brazil and 23.6% in Argentina. Carrefour is revitalising hypermarkets in Brazil, modernising the layout. It hopes to have 60 stores under this 'new generation' model by the end of 2016
  • PriceSmart continues to deliver good growth, reporting net warehouse sales up 8.6% on Q12015. The wholesaler sees Colombia as a massive opportunity and is steadily expanding there

Largely positive end to 2015

  • Cencosud's group sales were up 2.6% for 2015, with strong profit growth and positive stories from individual markets 
  • At GPA, Assaí goes from strength to strength, posting its highest net sales growth of 2015 in Q4. The atacarejo format has begun 2016 in a similar vein, accelerating sales growth in Q1
  • New stores helped Soriana to a 7.4% increase in income for 2015. It will open fewer in 2016 as it concentrates on integrating the La Comer acquisitions
  • Oxxo now has over 14,000 stores and revealed a 14% increase in revenue for 2015
  • Walmex reported net sales growth of 11% for 2015, calling it a solid year. In Mexico, e-commerce sales were a highlight, up 30% and contributing nearly 1% of total sales
  • In Brazil, Walmart's fourth quarter proved positive against a background of economic challenges. This year, finalising the store closures will be one of the key areas of focus
  • DIA called out Argentina for dynamic organic growth in 2015. Its price and proximity strategy works well in Argentina (and Brazil) as shoppers look to save money by shopping little and often

Expansion in new and existing markets

  • GPA has opened its first store in Salvador, Bahia, in Brazil's fast-growing north-east
  • Falabella is taking its DIY format Sodimac to Mexico this year via a joint venture with Soriana
  • Fast-growing Peruvian convenience chain Viva will open four stores in 2016, two in Lima and the others in new cities. Viva saw 2015 sales rise by 13% and expects an 8% increase this year
  • As La Comer begins life after divesting stores to Soriana, it aims to increase store numbers to 117 by the end of 2022
  • Cencosud is investing USD2.5bn over 2016 - 2019, in a plan to increase efficiencies, enhance omni-channel strategy and remodel stores 
  • Jerónimo Martins intends to open 70-100 ara stores in 2016 and to enter Colombia's central region surrounding Bogotá
  • Starbucks will open nine stores in Peru in 2016, taking it to 90 by year-end. It has opened a fourth in Córdoba, taking it to 95 in Argentina
  • Coop is to focus expansion on the interior of São Paulo state in 2016, opening stores in Sorocaba

Restructuring, new formats and connected stores

  • Walmart realigned its global structure, creating an emerging markets group comprising Latin America, India and Africa, and headed by former Walmex CEO Enrique Ostalé. It will enable Walmart to facilitate the transfer of best practice in markets facing similar challenges
  • Carrefour opened a connected store in Buenos Aires, with a host of technological innovations and features, building its multi-channel strategy
  • Cencosud opened its first Jumbo under 300 sq. m in Buenos Aires. Focused on fresh products and meal solutions, it forms the template for future outlets
  • Cencosud has put the IPO of its shopping centre division on hold, saying it is not the right moment to go to the market

Keep up with our Latin America analysis

Catherine Ellwood is an analyst at IGD. Her responsibilities include research into Latin American FMCG markets and retailers.