Rodrigo Patuzzo, CEO of Grupo Nós, which operates Oxxo and Shell Select stores in Brazil, is seeing an interesting trend among buyers.
Despite the pressure of inflation, many are choosing convenience over price.
Grupo Nós, a joint venture between Brazil’s Raízen and Mexican retailer Femsa, is working to capture a larger share of Brazil’s grocery market with its Oxxo stores, which focus on urban consumers.
“There is a tendency to search for time. That’s why people are less and less willing to take a car, cross a city, to go to a super cashier,” Patuzzo told Reuters.
Oxxo, which started in Brazil in 2020, now has 119 owned and operated stores and plans to have 309 stores by April next year, he said.
Luiz Claudio Dias de Melo, from consultancy 360 Varejo, said the model has benefited from the coronavirus pandemic and the remote work routine, where people chose to stay closer to home, helping local or small stores to overcome busy supermarkets.
João Gabriel Batista, a 30-year-old publicist, was won over by the proximity market to make his purchases by the time factor, despite costing a little more.
“It’s better to go to a fast market than to save a few reais in line at a big market”, he said.
Oxxo competes in Brazil with Minuto Extra and Minuto Pão de Açúcar, from GPA, with 241 stores, and Carrefour Brasil, with 145 express stores.
Hirota, another local brand, has 109 stores in the country. In a break from its Mexican model, Oxxo added bakery and fruit and vegetables.
Patuzzo admitted that issues such as high inflation — nearly 12% annually — raises logistics costs for the company, but the company is trying to mitigate that with third-party operators for fruit and bakery logistics and smaller stores, saving on rent and bills.
“We want to reach a level of efficiency that will allow us to open the business to the whole of Brazil”, said Patuzzo.
In April, Itaú BBA said in a report that Brazil could be the next big market for Oxxo outside of Mexico. The convenience format has only a 1% share in Brazil, leaving plenty of room for expansion.
Source: CNN Brasil
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