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Acquisitions and new entries change Mexico retail landscape

retailWhen looking at the retail industry in Mexico, it appears that the country’s efforts to move into e-commerce have to be the most important trend currently.  Mexico is still playing catch-up to its North American neighbors in the transition to on-line sales, facing hurdles such as low credit card penetration and a strong perception among consumers of high fraud risk in electronic purchases.  But while our e-commerce marketplace sorts out its issues, brick-and-mortar stores continue to play a leading role in Mexican retail, and reshuffling among leading chains as well as the entry of foreign chains into the market is driving continued evolution of the retail landscape.

Over the past 20 years, the entry of Walmart into the Mexican market in the 1990s and the rise of regional chains to national prominence has upset the balance of power in the industry.  Back in 2007, Gigante, one of the country’s dominant supermarket operators, marked a turning point when it sold its 205 grocery stores to emerging northern rival Soriana.  The move effectively signified Gigante’s departure from grocery and general merchandise retailing, although Gigante remained in the retail market operating smaller specialty store chains, and announced Soriana’s entry to the nationally dominant group.  In 2015, Soriana further solidified its position in the market with another aggressive move when it acquired 160 grocery stores and three distribution centers from leading retailer Comercial Mexicana.  While Comercial Mexicana, now called La Comer, remains in the game to focus on a smaller number of more specialized retail formats, the acquisition by Soriana further cements the Monterrey-based chain’s nationwide presence. Continue reading Acquisitions and new entries change Mexico retail landscape