Chedraui Boosts US Strategy With US$120 Million Center

Grupo Chedraui is bolstering its US business strategy with the integration of operations into a new distribution center in Rancho Cucamonga, California, alongside a focus on private label products and competitive pricing.

The Mexican supermarket chain operates 384 stores across California, Nevada, Arizona, New Mexico, and Texas under the banners El Super, Fiesta Mart, and Smart & Final. The state-of-the-art 1.4-million-square-foot facility replaces five previous distribution centers and supports both Smart & Final and El Super formats.

Carlos Smith, CEO, Chedraui USA, described the facility as a critical US$120 million investment to support long-term store growth strategies. Antonio Hernández, analyst, Actinver, highlighted that the center offers 30% additional capacity, enabling future expansion and improved inventory management.

The operational transition to the new facility was completed in May, with June marking the first month under the consolidated model. Margin benefits are expected to begin in the second quarter of 2025, aided by favorable year-over-year comparisons, as transition-related costs were absorbed in the latter half of 2024.

Further cost savings are anticipated in 2026 through logistics optimization and enhanced productivity, Hernández noted.

Currently handling dry and frozen goods, the center will soon incorporate perishable items. Perishables are central to Chedraui’s hybrid wholesale-retail strategy, representing 40–60% of sales in El Super and Fiesta Mart formats, though less at Smart & Final.

Chedraui is also streamlining its private label offerings. The Smart & Final brand portfolio has been consolidated into three core labels, led by First Street, which is now being introduced into Chedraui stores in Mexico. Private label penetration at Smart & Final is approximately 30%.