Discounters in Colombia

2021 DEVELOPMENTS

Discounters resonates with demand trends during the COVID-19 pandemic

The COVID-19 crisis has served to reinforce the competitive standing of the discounters channel in modern grocery retailing in Colombia. While players in the sales channel had to slow down their expansion strategies during the pandemic, they have seen a significant increase in sales because their offer has resonated with the needs of consumers in the markedly changed market conditions of the crisis.

Having adopted a vast expansion strategy, Koba Colombia’s D1 remains the leading player in the discounters channel in 2021

Koba Colombia’s D1 retains its leadership position in the discounters channel in 2021. Over the review period, the retailer focused its expansion strategy on small and medium-sized towns in the country.

Pandemic motivates discounters to offer cashless payment options and last mile delivery services

Having initially only accepted cash payments, the discounters channel has diversified consumers’ payment options in recent years, with D1, for example, beginning to accept credit cards towards the end of 2019. The transition to cashless payment was significantly accelerated during the COVID-19 crisis, with the pandemic adding a new dimension to the growing popularity of cashless payments as consumers became concerned about the potential for viral transmission via cash.

PROSPECTS AND OPPORTUNITIES

Further development of the private label segment

One opportunity for growth for discounters is the development of the private label segment during the forecast period. Measures introduced to curb the spread of the pandemic undermined consumer confidence and purchasing power, making them more price-conscious and more inclined to both shop in discounter outlets and opt for own brand products.

Commitment to communication paying off

While discounters operators have engaged in efforts to streamline the links in their operations in recent years, players have also worked to modernise their operations and invest in strategic areas such as communication. Discounters players have opened official pages on social media sites such as Instagram and Facebook, which has enabled them to establish a closer relationship with consumers.

Hard discounters to continue aggressive expansion

Hard discounters’ growth strategies is set to continue to focus on aggressive expansion, as players seek to reach more regions of Colombia through the coverage of smaller cities and towns, as well as major urban centres. Although expansion plans were abruptly suspended by the COVID-19 crisis, they resumed during 2021.