Mexico Retail Expands Small Formats as Sales Seen Rising

The Mexican retail sector is shifting away from the traditional dominance of large-scale hypermarkets, according to the “2025 Results and 2026 Projection” report by the National Association of Self-Service and Department Stores (ANTAD). Nearly 1,700 compact or specialized units were opened over the past year, while same-store sales are projected to grow 3.9% in 2026.

Retailers are redesigning their store footprints to adapt to a “hybrid consumer” who prioritizes convenience and speed. “In a retail environment expanding toward smaller formats, the difference will lie in daily execution,” said Francisco Martínez, VP of Sales, Teamcore México. “It is no longer enough to open more stores; it is essential to operate with precision, visibility and data-driven decision-making. This is where artificial intelligence becomes a key factor for growing without losing control.”

Chedraui and the Proximity Pivot

Chedraui is leading domestic expansion, announcing 2026 strategic guidance focused on capturing a greater share of the convenience segment. The retailer plans to open 152 new locations this year, 147 of which will be in Mexico. Notably, nearly 90% of these domestic openings — 130 units — will operate under its Supercito proximity format.

By 3Q25, Supercito had become the group’s most widespread format, with 277 stores compared to 214 flagship Chedraui hypermarkets. The company projects a 5.7% expansion of its sales floor in Mexico and a 1.6% increase in the United States, resulting in consolidated growth of 4.3%. To support this strategy, Chedraui has set its 2026 capital expenditure (CAPEX) at 3.3% of estimated consolidated sales.

The retailer forecasts same-store sales growth of 3% to 4% in Mexico, with total segment sales rising between 8% and 9%. To offset rising labor costs, the company is implementing internal efficiency measures. Chedraui also reaffirmed its commitment to the government’s Package Against Inflation and Scarcity (PACIC), which caps the price of a 24-item basic basket at MX$910. In November, President Claudia Sheinbaum stated that such agreements would help strengthen investment and economic performance in 2026.

Competitive Landscape Intensifies

Chedraui’s push into proximity retail places it in direct competition with established leaders in a segment expected to grow at a compound annual growth rate (CAGR) of 7.68% through 2033.

The category is dominated by FEMSA’s OXXO, which operated more than 24,000 stores as of late 2025 and accounts for nearly 29% of Mexico’s overall retail market. OXXO leverages dense urban penetration and complementary services such as bill payments and financial transactions to maintain its leadership position.

Walmart de México y Centroamérica (Walmex) follows with its Bodega Aurrerá Express format, which comprises approximately 1,480 units within a broader network of 2,606 Bodega stores.

While OXXO’s smaller footprint emphasizes impulse and convenience purchases, Supercito stores average around 350 square meters, allowing for broader assortments, particularly in groceries and perishables. This positions Chedraui as a hybrid challenger in the segment. Soriana and discount chains such as Tiendas 3B complete a competitive landscape that is expected to add approximately 3,000 new stores in 2026.

Efficiency Over Scale

Financial pressures are accelerating the shift toward compact formats. Elevated energy, maintenance and labor costs associated with hypermarkets have made “profitability per square meter” a critical KPI. Smaller stores reduce fixed costs and enable faster expansion in densely populated urban areas.

Demographic shifts reinforce this trend. Smaller household sizes and digitally driven lifestyles have reduced demand for large, infrequent shopping trips. More than 60% of urban consumers now prioritize proximity stores for quick, mission-based purchases, even if prices are marginally higher.

At the same time, stores increasingly function as omnichannel nodes, serving as micro-fulfillment centers, pickup points and experiential showrooms, integrating physical and digital retail strategies.

International Headwinds and Financial Outlook

In the United States, Chedraui USA anticipates a more challenging first half of 2026 due to stricter migration policies under the administration of President Donald Trump. The company identified these policies as a potential drag on store traffic and consumer spending. It expects stabilization in the second half of the year.

Chedraui USA projects same-store sales growth of 1.0% to 2.0% and total sales growth of 2.0% to 3.0% in dollar terms. The division operates 384 stores across California, Nevada, Arizona, New Mexico and Texas. It expects EBITDA margin expansion of 30 to 60 basis points, supported by operational efficiencies from the Rancho Cucamonga Distribution Center.

On a consolidated basis, Chedraui anticipates an EBITDA margin expansion of 15 to 35 basis points in 2026. The company maintains a net bank debt-to-EBITDA ratio of approximately -0.3x, reflecting a conservative leverage position.

A Banorte analysis stated that “the 2026 guidance confirms a scenario of stable growth aligned with market expectations; however, relevant challenges persist, particularly cost pressures derived from minimum wage increases.”