After posting a steep decline in current value terms in 2020, traditional grocery retailers saw sales rebound strongly in 2021. As concerns about potential exposure to COVID-19 receded with the rollout of vaccines and a drop in community transmission rates over the latter half of the year, Ecuadorians became less inclined to consolidate grocery shopping trips by visiting supermarkets, hypermarkets or discounters every week or fortnight, and once again started buying food and other essentials on a day-to-day basis in independent small grocers, the dominant format in the channel.
Heavily dependent on oil revenues and already in the midst of a worsening debt crisis before the outbreak of the virus, Ecuador’s economy has been hit particularly hard by COVID-19. Many people who have recently become unemployed or suffered a reduction in income due to the pandemic have attempted to improve their financial situation by opening independent small grocers outlets.
Launched in 2008, Banco de Guayaquil’s “Banco del Barrio” concept allows retailers and other types of commercial businesses to act as non-bank correspondents. This means they are authorised to provide basic financial services such as deposit, withdrawal and payment facilities on behalf of the bank.
While traditional grocery retailers is expected to expand in current value terms throughout the forecast period, the channel will continue to lose ground to modern formats offering wider product assortments, cheaper prices and more attractive credit terms. With many consumers having recently experienced a drop in purchasing power due to the economic fallout of COVID-19, independent small grocers in particular look set to face more intense competition from discounters.
Despite increasing competition from modern formats, traditional outlets will continue to occupy a central position in Ecuador’s grocery retailing landscape over the forecast period. These stores vastly outnumber their modern counterparts, and in rural areas are often the only option residents have for buying groceries.
Although macroeconomic conditions in Ecuador look set to improve over the forecast period, because the pandemic has greatly exacerbated long-term structural challenges, unemployment and poverty rates are likely to remain high for some time. It is expected these conditions will continue to encourage many people to set up small retail businesses to generate income, hence traditional grocery retailers should experience consistent growth in outlet numbers.
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Understand the latest market trends and future growth opportunities for the Traditional Grocery Retailers industry in Ecuador with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Traditional grocery retailing is the aggregation of those channels that are invariably non-chained and are, therefore, owned by families and/or run on an individual basis. For Euromonitor traditional grocery retailing is the aggregation of three channels: Independent Small Grocers, Food/Drink/Tobacco Specialists and Other Grocery Retailers. While there can be modern (i.e. chained) food/drink/tobacco specialists or other grocery retailers, due to the store's presence in the channel, these stores are still considered as traditional for Euromonitor International.See All of Our Definitions
This report originates from Passport, our Traditional Grocery Retailers research and analysis database.
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