Non-Grocery Specialists in Costa Rica

PROSPECTS

Non-grocery specialists adapt to increasing competition

Increased competition within and between many different channels and formats has been one of the most significant trends in retailing in Costa Rica in recent years. This has compelled all kinds of non-grocery specialists to try to strengthen their competitiveness by increasing the frequency of price-based promotions and diversifying their product assortments.

Grupo Monge and Grupo Unicomer embrace diversification

One successful example of a non-grocery specialist that has adapted to increased competition by diversifying its assortment is Grupo Monge SA. During the review period this local company began selling motorcycles (not covered by Euromonitor International research) in its electronics and appliance specialist retailers outlets.

Significant investment in online stores expected

Purchases in physical stores continued to dominate non-grocery specialists current value sales in 2017. However, mid-to-high-income consumers showed growing interest in the online sales platforms of such retailers, primarily for the purposes of price comparison and product research.

COMPETITIVE LANDSCAPE

Most players diversify and rationalise as competition intensifies

Increasing direct and indirect competition, particularly on prices, led most non-grocery specialists to diversify their assortments towards the end of the review period in an effort to improve margins and attract more consumers to their outlets. A number of major players also sought to strengthen their competitiveness by closing less profitable outlets and remodelling existing stores to better meet the expectations of shoppers.

Financing problems force Casa Blanca to downsize

The growing challenge from other channels such as hypermarkets and warehouse clubs intensified competitive pressures on some major local non-grocery specialists over 2016-2017. One such player was electronics and appliance specialist retailer Casa Blanca.

Shift towards smaller stores and increased online activity will continue

Over the forecast period, most non-grocery specialists are expected to focus on developing their internet retailing capabilities to compensate for the negative impact that the growing popularity of online shopping is likely to have on their physical outlets. It is also expected that players will seek to improve the performances of their physical store networks in terms of sales per square metre by favouring smaller outlets, cutting operational costs, stepping up promotional activities via social media and frequently running discount campaigns to increase inventory rotation.

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