Traditional Grocery Retailers in Colombia

PROSPECTS

Growth continues as players adjust their strategies to compete

Traditional grocery retailers continued to see surprisingly strong current value growth in 2019, along with a slight rise in outlet numbers. These outlets remain crucial in the local retail environment and are particularly popular amongst lower-income consumers.

Collaborations help traditional grocery retailers to survive

Traditional grocery retailers are being targeted by companies such as Chiper and Almacenes Éxito to bring them on board in a relatively new collaborative business model. The traditional grocer adopts the operational practices of Éxito or Chiper and their brands Surtimax Amigo and Mercadito respectively, and they centrally buy all their products from the mother company.

Digital transformation to empower traditional grocery retailers

Different web platforms are seeking to encourage traditional grocery retailers to join the digital economy. Taking advantage of government help via programmes such as Empresario Digital or Mipyme Vive Digital, traditional retailers are being encouraged to use digital platforms to place orders with suppliers, record sales, manage inventories and accept means of payment besides cash, as well as to sell to customers.

COMPETITIVE LANDSCAPE

The two main players see sales declines

Avidesa Mac Pollo continued to lead traditional grocery retailers in 2019, followed by Surtifruver de la Sabana. Both players faced challenges in 2019, and saw value sales declines despite increasing their outlet numbers.

Better meeting consumer demand to compete with modern retail channels

The entry of modern channels such as discounters has given Colombians the possibility to purchase relatively good-quality products at lower prices than those in traditional grocery retailers. This was especially important as household incomes decreased, but led to the closure of some independent small grocers.

Remaining a strategic partner to big brands

Big consumer brands keep traditional grocery retailers in their distribution landscape, as one of their best allies. In turn, by offering well-recognised brands, players in traditional grocery retailers have a good base for their product portfolios.

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