Discounters in Mexico

PROSPECTS

Discounters observes moderate growth

Discounters is one of the most important channels within modern grocery retailers in Mexico. It showed a moderate positive performance in 2018, despite being one of the formats with a longer presence in the market.

Discounters can expect a challenging future

Discounters in Mexico is expected to continue to see moderate single-digit growth over the forecast period, given that most of the current competitors have investment plans for expansion through the opening of new outlets in cities where modern grocery retailing is underdeveloped. The rapid growth of convenience stores could be one of the main challenges, mostly due to their locations and service hours; however, the lower prices offered by discounters is one of the strengths that will be difficult for competitors in modern and traditional grocery channels to overcome.

Small cities and towns are the main targets for discounters

Given that large and mid-sized cities are the main focus for hypermarkets, smaller cities and towns are the most attractive for discounters to continue their expansion plans. The arrival of such stores will also benefit these cities and towns, which are located mostly in rural areas, by generating employment.

COMPETITIVE LANDSCAPE

Bodega Aurrera celebrates 60 years in the market

Mexican consumers encountered the modern grocery retail format 60 years ago via the Mexican retailer Aurrera, which was acquired by Wal-Mart in 2000. After all these years in the market the brand has positioned itself amongst Mexican consumers as the strongest competitor within discounters, with three brand concepts – Bodega Aurrera, Mi Bodega Aurrera and Bodega Aurrera Express, which accounted for more than half of value sales in 2018; an increase of one percentage point from 2017.

Tiendas 3B aims to lead discounters

In 2018, Tiendas 3B saw the fastest growth in terms of number of outlets and value sales within discounters, and is getting closer to the leading brand Bodega Aurrera in terms of number of outlets, reaching 850. Tiendas 3B has surpassed all other competitors, including Soriana with its two formats, and if it continues to see double-digit growth it is possible that it will surpass Aurrera with its three formats in less than 10 years.

Organización Soriana operates with fewer brands

As part of the restructuring announced in the previous year by the company after the acquisition of Controladora Comercial Mexicana, some brands were eliminated from the brand portfolio of Organización Soriana. Regarding the discounters channel, the brand Bodega Comercial Mexicana has been eliminated, and these outlets were converted into Soriana Mercado outlets.

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