Traditional Grocery Retailers in Costa Rica

PROSPECTS

Location, value for money and offering goods for both individuals and families, are key factors that helps traditional grocery retailers record steady growth

Key factors that drive sales in traditional grocery retailers include being close to homes, offering an assortment of goods - including individual servings sizes and larger pack sizes for families – and offering excellent value for money. This is particularly the case of less urban locations where modern grocery chains have limited presence.

The uncertain economy benefits traditional grocery retailers who target low-income and middle-income consumers

A tumultuous economy has resulted in consumers spending less or choosing brands that cost less – especially when it comes to essential and staple goods. This has benefited small independent grocers that usually target low and mid-level consumers.

To improve performance over the review period, traditional grocery retailers will start to negotiate price points

Following the lead of independent Chinese supermarkets over the review period, based on consolidated buying structures that benefit from large volume discounts and their organised negotiating capacity, a larger base of local traditional independent retailers will look to adopt similar practices. It is anticipated that both governmental and non-governmental organisations will take the lead in promoting a more extensive range of business capacities among this fragmented base of small independent players.

COMPETITIVE LANDSCAPE

Players focus on local customers and traditions, and independent Chinese owned supermarkets continue to shake-up the landscape

The business models of smaller traditional grocery retailers across Costa Rica, continued to illustrate local customs and traditions in 2019. The retailers leverage on good neighbours relations, location and proximity, product availability and often informal credit access - sustaining relevancy among lower-end consumers.

Specialisation allows players to compete by offering a key point of difference

Additional levels of specialisation has also been seen across the expansion of traditional grocery retailers. This trend is reflected in the further development of higher-end outlets, ranging from artisanal bakeries to pasture-raised meats.

Traditional grocery retailers will offer added value to remain competitive in the landscape

As modern grocery retailers continue to expand to include discounters and convenience stores, traditional grocers will seek to remain competitive by offering added-value to consumers, including convenient transactions. This scenario will also encourage the emergence of sales associations and cooperatives over the forecast period.

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