Traditional retailers continue to be the most relevant outlets for sales of groceries in Peru. This channel includes market stalls that usually offer very low prices although it is mainly comprised of bodegas which are small neighbourhood stores that sell groceries.
Traditional grocery retailers have been facing growing competition in recent years due to the advance of modern grocery retailers. However, since the pandemic this competition has intensified, not only due to the change in consumer habits among those seeking to avoid contagion, but also because of the wider range of products they stock which provided a greater degree of certainty of finding everything needed under one roof.
The high competition that has occurred since the onset of the pandemic has made many traditional grocery retailers take actions to modernise and improve their offer of neighbourhood customer service. As such, most have done their best to comply with sanitary protocols (although this aspect still does not generate the same trust as the modern channel), while also expanding their product assortment, including many fruit and fresh vegetables, which they previously generally did not sell.
The main competitive advantage of traditional grocery retailers is their proximity to the customer, not only because they are physically located near to their homes, but especially because they tend to establish a personal closeness with them, knowing them by name, their family and their preferences, thanks to frequent conversations and interaction. This personal closeness is stronger in smaller or more remote cities and towns, where modern grocery retailers are less well established.
The significant dynamism of discounters in recent years constitutes an important threat to traditional grocery retailers, especially with the opening of stores in areas closer to consumers' homes, which is precisely one of the main valued attributes of bodegas.
The opening of new bodegas over the forecast period is set to resume as low levels, similar to the trend seen prior to the pandemic. This will be due to significant and growing competition from other channels, with the number of outlets possibly even decreasing as modern grocery retailers resume their expansion plans.
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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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