Chedraui to Invest MX$10 Billion on Supercito, Oxxo’s New Rival

Retail giant Chedraui has unveiled ambitious investment plans totaling around MX$10 billion in 2024, representing one of its highest investments pledges in recent years. A key strategic focus involves the expansion of its proximity format, Supercito, as it aims to carve a niche in a market where Oxxo currently holds a leading position in Mexico.

"We anticipate growth in 2024 through store openings, particularly emphasizing our Supercito format. We're planning a significant number of openings in this format, along with continued growth in other segments," said Arturo Vasconcelos, Deputy General Director, Chedraui for El CEO. He highlighted Supercito's role in catering to the demand for both complete pantry purchases and quick replenishments, leveraging its proximity to consumers' homes.

Chedraui's expansion blueprint includes the launch of 100 Supercito branches in 2024, doubling the 50 introduced in 2023 and significantly surpassing the 25 in 2021 and 20 in 2020. As part of its business strategy, Chedraui plans to open seven Chedraui stores and three Súper Chedraui outlets in Mexico. In the United States, the company aims to establish six Fiesta, four El Super, and one Smart & Final stores.

Vasconcelos emphasized the importance of tailoring store formats to specific locations, ensuring success by aligning commercial offerings with customer needs. "Our diverse formats serve distinct purposes for our customers. From large to medium-sized stores, each fulfills pantry needs, with larger stores offering a broader range, including electronics, clothing, and more," Vasconcelos said.

The projected capital expenditure is among the largest in recent years. In the preceding year, Chedraui allocated MX$5.29 billion, while in 2022, it rose to MX$6.78 billion. In 2021, investments reached MX$15.8billion, inclusive of the Smart & Final acquisition. In contrast, 2020 saw investments of MX$2.5billion, MX$4.09 billion in 2019, and MX$4.5 billion in 2018.

"Our investment projection is approximately MX$10 billion, earmarked for the opening of 100 Supercito stores, our smallest format, spanning around 350 square meters each," Vasconcelos added.

Regarding Supercito, the proximity format, Vasconcelos highlighted its convenience for quick replenishments due to its location, diverse product selection, and competitive pricing strategy. In Mexico's proximity retail landscape, FEMSA leads with 21,583 stores as of September, bolstering formats like Bara, which boasts 309 units and competes directly with Tiendas 3B and Tiendas Neto.