Chained warehouse clubs represents a relatively novel model in the Colombian market, with only one significant player: PriceSmart. The business model, which involves paid membership of the club, saw good initial growth, suggesting that Colombian consumers are very curious about new launches.
During 2020, as store closures and concerns about exposure to the COVID-19 crisis undermined the performance of store-based retailing, PriceSmart strengthened its online proposal by collaborating with Rappi, a Colombian player whose mobile app allows users to order a wide range of products for delivery, including groceries and consumer health products.
Strategies such as the use of co-branded credit cards, such as the PriceSmart Colpatria credit card, reward customer loyalty by granting them benefits for purchases made in outlets, as well as different national and international establishments. Members find a warehouse club that gives them benefits beyond the outlet itself, as well as purchasing possibilities in other places, thereby enabling them to earn greater privileges for being part of the club.
Having to pay an annual membership fee to access an exclusive brand is something that Colombian consumers have previously been unwilling to accept. Previous attempts resulted in failure and a migration to the cash and carry business model.
What is perceived as a problem for some is an opportunity for others. Even before the COVID-19 crisis, socioeconomic difficulties, with tax increases, price increases, loss of confidence and political uncertainty, were encouraging consumers to diversify from their usual retail channels.
There are major disruptive players in retailing in Colombia, which have been the protagonists of significant movements in the country, and PriceSmart has been one of these players. The adjustment of the competitive landscape has resulted in losers as well as beneficiaries, which have managed to gain important sales.
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Understand the latest market trends and future growth opportunities for the Warehouse Clubs industry in Colombia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Warehouse clubs are chained outlets that sell a wide variety of merchandise, typically situated in out-of-town locations, with a selling space of over 2,500 sq metres (and invariably over 4,000 sq metres in total size). Customers have to pay an annual membership fee in order to shop. The clubs are able to keep prices low due to the no-frills format of the stores and large volume SKUs. Example brands include Costco, Sam’s Club (Walmart), and Atacadão. Excludes sales attributable to membership fees and business-to-business sales. Also excludes cash & carry and warehouse outlets (which are typically oriented towards businesses, rather than consumers). Note: Local variants, such as atacarejos in Brazil, are included in this channel.See All of Our Definitions
This report originates from Passport, our Warehouse Clubs research and analysis database.
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