Retail Market Slows as Mexico's 1Q25 Sales Drop -0.2%

In the first quarter of 2025, Mexican department stores and supermarkets reported a -0.2% decline in same-store sales, signaling a general slowdown in the retail market, according to the National Association of Supermarkets and Department Stores (ANTAD). However, results from major public companies in the sector presented a contrasting narrative, indicating that larger players are adapting more effectively to current market challenges.

Liverpool and Suburbia reported consolidated growth of 9.5%, driven by a continued focus on digital expansion and enhancing customer experience. Online sales now account for 28.7% of Liverpool’s total, with gross merchandise value (GMV) rising by 15.8%. Suburbia also saw a 22.7% increase in active app users and stronger performance in its direct (1P) sales channel.

However, this digital push came with financial trade-offs. Liverpool’s gross margin declined from 33.0% to 30.3%, attributed to more aggressive discounting and higher financial provisions, which contributed to a drop in EBITDA.

El Palacio de Hierro achieved nearly 11% growth, fueled by a 27% increase in digital sales. The company’s "Extended Catalog" initiative integrates physical stores with digital tools such as artificial intelligence for product planning and distribution. This strategy aims to boost operational efficiency and improve the customer experience.

Grupo Gigante, despite closing 29 stores, including Office Depot and Radio Shack locations, recorded a 4.9% increase in same-store sales and a 7.1% rise in total sales, demonstrating operational resilience amid its consolidation efforts.

Elektra, whose commercial business accounts for 35% of total revenue, reported a 5% increase in total sales, driven primarily by demand for motorcycles and home appliances. However, the company did not disclose same-store sales figures or elaborate on its omnichannel strategies, underscoring potential areas for improvement in logistics and digital integration.

The overall decline highlighted in ANTAD’s report suggests that smaller retailers are struggling to keep pace in a digital-first environment. While larger chains capitalize on their scale and technological investments, smaller players face mounting pressure to modernize operations and adapt strategies to remain competitive.