Discounters in Chile

2020 IMPACT

Economic fallout of Coronavirus (COVID-19) drives consumers into the arms of discounters

Discounters attracts consumers looking to reduce spending on staple products and access competitive price points whenever possible. However, the number of outlets remains low, compared with supermarkets.

Arrival of Colombian giant Justo & Bueno could disrupt the category

Justo & Bueno, a Colombian discounter player, purchased the small Erbi brand to enter the Chilean market in 2020. While Erbi is small brand, the expectation is that Just & Bueno will replicate the strategy that has made it successful in Colombia.

Discounters fail to exploit key channel shift to limit exposure and sales opportunities

The quickly introduced limitations on consumer movement in response to the outbreak of COVID-19, and the related desire to avoid the crowds experienced in all grocery retailers, meant that many consumers saw a convenient and safer solution in e-commerce. This translated into a triple-digit jump in sales almost immediately.

RECOVERY AND OPPORTUNITIES

Lack of e-commerce presence set to stem the development of discounters in the new retailing reality

Discounters is expected to continue to gain ground over the forecast period, with consumers looking for competitive prices on products, mainly staples. This will allow them to reduce their spending and maintain stocks of staples in the home.

Competition for leadership of the category remains stable, but the entry of a major new player is likely to add dynamism to the landscape

In 2020, the competition for leadership of the category continued to be waged between SMU, with its Mayorista 10 and Alvi brands, and Walmart Chile, with Bodega ACuenta. While SMU continued to try to grow value sales more organically, without the opening of new outlets, Walmart added two new Bodega ACuenta stores in 2020.