abhishreshthaa
Abhijeet S
Grupo Exito also known as Almacenes Exito S.A. is a leading Colombian retailer which directly operates 262 stores (2009) and others indirectly (through stakes in other companies) offering a wide range of food and non food products. Though originally a textiles maker and seller (under such brand names as Arkitect, People, Bronzini, Pop Rose) acquisitions more recently (mostly within the last 10-20 years) have further diversified its business making it a major grocer (under brand names like surtimax and carulla sales of food products make up about 70-75% of revenue). At its hypermarkets (the largest of which is the Exito chain) it sells both packed foods and perishables in addition to department store type products ranging from electronics to furniture.
Almacenes is Colombia's largest supermarket chain. After being accused of price gouging in Venezuela (where it controls Cativan) by Hugo Chavez the Venezuelan leader considered buying a controlling interest in the company.
Strengths
* Dominant position in Colombia
* Limited competition. There are few acquisition targets as the food retail sector in Colombia is highly informal (60% mom & pops)
* Diversification in formats and target customer
* Strong brand and format recognition - top of mind
* Geographical coverage
* Corporate governance
* Strategic alliance with foreign partner (Casino)provides exchanges of best practices
* Strong client base in loyalty program
Weaknesses
* Manageability with too many formats and brands
* Duplicated administrative structure with the acquisition of Carulla- Vivero
* Outdated stores in need of remodeling
Opportunities
* Strong economic environment in Colombia boosting the consumer sector
* Increasing purchasing power from families and easier access to credit should increase consumption of higher value-added non-food items
* Population is expected to migrate from shopping in informal to formal retail
* Small portion of the population with access to banking and credit services
* JV with Bancolombia to boost traffic to stores, ticket as well as increase ROE with the introduction of additional products such as insurance and personal
loans.
* Follow-on providing funds to accelerate further
expansion and store remodelings
Threats
* Improving consumer stance in Colombia is attracting
new entrants to the retail sector (Carrefour and Falabella from Chile)
* Brand repositioning could exclude some loyal customers
* Downturn in Colombia's economic stance could limit potential growth of the retail sector
* Diversification of business could divert focus
Almacenes is Colombia's largest supermarket chain. After being accused of price gouging in Venezuela (where it controls Cativan) by Hugo Chavez the Venezuelan leader considered buying a controlling interest in the company.
Strengths
* Dominant position in Colombia
* Limited competition. There are few acquisition targets as the food retail sector in Colombia is highly informal (60% mom & pops)
* Diversification in formats and target customer
* Strong brand and format recognition - top of mind
* Geographical coverage
* Corporate governance
* Strategic alliance with foreign partner (Casino)provides exchanges of best practices
* Strong client base in loyalty program
Weaknesses
* Manageability with too many formats and brands
* Duplicated administrative structure with the acquisition of Carulla- Vivero
* Outdated stores in need of remodeling
Opportunities
* Strong economic environment in Colombia boosting the consumer sector
* Increasing purchasing power from families and easier access to credit should increase consumption of higher value-added non-food items
* Population is expected to migrate from shopping in informal to formal retail
* Small portion of the population with access to banking and credit services
* JV with Bancolombia to boost traffic to stores, ticket as well as increase ROE with the introduction of additional products such as insurance and personal
loans.
* Follow-on providing funds to accelerate further
expansion and store remodelings
Threats
* Improving consumer stance in Colombia is attracting
new entrants to the retail sector (Carrefour and Falabella from Chile)
* Brand repositioning could exclude some loyal customers
* Downturn in Colombia's economic stance could limit potential growth of the retail sector
* Diversification of business could divert focus