Latin America: key retail developments in Q3

Date : 25 October 2016

In this update, we look at what happened at retailers across the region in the third quarter of 2016, including who's winning, the hotspots for expansion, and who's being most innovative in-store.

Retailer results: who's winning

  • Internationally, net sales declined for Walmart in Q2 of fiscal 2017. Walmex reported strong momentum across all formats, divisions and countries, while comparable store sales increased in Brazil despite the ongoing economic recession 
  • Carrefour reported a healthy performance in Latin America in Q3. Like-for-like sales were up by 14.2%, with a 12.4% increase in Brazil and +18.0% in Argentina
  • GPA said its food businesses drove a 4.4% increase in consolidated total sales for Q3. Once again, Assaí was the most outstanding performer
  • Out of its international markets, Mexico delivered one of the strongest performances for Costco in Q4

Expansion plans

  • The first ara stores opened in the Colombian capital Bogotá in September. Parent company Jerónimo Martins' goal is to have 1,000 stores across the country by 2020, targeting a new region every year 
  • Brazilian drugstore operator RaiaDrogasil said it intends to grow by opening stores rather than acquisitions
  • The Body Shop opened its first store in Chile in October. We expect more, as its Latin America director believes the region has plenty of potential
  • La Comer opened its first premium City Market outlet outside Mexico City

In-store gardens and other innovations

  • Walmart launched Pick Up (click and collect) in Argentina in September
  • Brazilian retailer Zona Sul is trialling 'fresh gardens' in stores, displaying products like herbs and onions as if they are growing, to emphasise their freshness
  • In Mexico, Soriana partnered with Uber to give away a coupon worth 150 pesos (around USD8/EUR7) for a journey to a Soriana store. The promotion runs until the end of December 2016 in the 25 cities in which Uber operates
  • Oxxo is developing an app to allow its customers to make payments, for example for electricity, without going to stores
  • Cencosud converted three supermarkets to its wholesale 'atacarejo' format as it tries to turn around its struggling Brazilian business 
  • In Uruguay we saw two retailers that really impressed us: Ta-Ta and Tienda Inglesa. You should definitely visit the latter for its lively atmosphere and great in-store displays 

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.