Supermarkets show strength again. With the arrival of the new normality, and after a year of increases driven by panic purchases, they closed 2021 with growth among inflationary threats in the country.
In December, inflation closed at 7.37%, its highest level in 20 years and it seems that it is not going to give up. Analysts consulted by Citibanamex estimate that the annual general inflation for February will be 7.23%, and the supermarket chains will not reverse their growth in sales, at least for now.
One of the catalysts for the rebound in chain sales has been the new normality, which has brought shoppers back to the sales floor, and to carrying more products in carts, in addition to the basic basket. Marisol Huerta, a stock market analyst at Ve por Más, comments that, with the return of traffic to the sales floor, people take the opportunity to bring products that are more profitable, and that are outside the basic basket.
“The chains are still experiencing a rebound effect from the pandemic, and for this first part of the year they are doing well and still have an opportunity to have a better performance in revenue. In the pandemic, basic needs were covered, it was the fridge list, now when they go to the store people see the products that are on the islands, and buy they think they need them, ”he explains.
The specialist details that, in the case of Chedraui and Soriana, it was the return of vacationers that again gave a boost to sales towards the end of last year. Both retailers have their bulk in entities with a beach, such as Acapulco or Veracruz.
Chedraui, which last year added the Smart & Final stores in the United States to its operations, had sales of 65,079 million pesos in the fourth quarter, a growth of 67% year-on-year, due to the favorable effect of the consolidation of both operations .
On a comparable basis, that is, not including Smart & Final revenues, sales growth was 9.2% to 42,542 million pesos. Meanwhile, the operative flow of retail directed by Jose Antonio Chedraui, grew 15.5% to 3,200 million pesos. The advance of the net profit increased 19.4%.
Soriana, owned by the Martín Bringas brothers, had revenues of 42,814 million pesos, an increase of 4.5% compared to the fourth quarter of last year. In its financial statement, the company detailed that the increase in sales responds to the opening of two stores during the quarter, a Soriana Supermarket in Colima and a Hypermarket in Nuevo León, in addition, in December Sodimac opened a store in Nuevo León.
In the last three months of 2021, the chain’s net profit was 1,731 million pesos, which is equivalent to a growth of 7.9% compared to the same quarter of the previous year. Sornana also increased its operating flow to 3.2% to 3,947 million pesos.
Walmart stayed on the right foot. The largest of retailers grew its sales by 9.4% to 214,571 million pesos, from 195,988 million in the fourth quarter of 2020, according to the data in its quarterly report.
The chain’s profits stood at 13,254 million pesos, that is, they increased 5.2% compared to the net profit it registered in 2020, while its operating flow went from 22,347 million pesos to 23,564 million pesos, this is an increase of 5.4%.
The company finished implementing its new e-commerce platform in all the countries of the Central American region during the last quarter of 2021, and in 2021 e-commerce sales represented 1.7%.
La Comer continues to show its strength. The chain, which since last year has shown to be the one that has best responded to the crisis, would be the one that can most resist the ravages of inflation, since it is aimed at a public with greater purchasing power, which, according to specialists, usually more resistant to crises.
Retail, which has the bulk of its operations in the center of the country. It was the one that grew the most in sales and profits during the last quarter of 2021. In its financial report, it stated that its net income rose 54.2% to 430 million pesos. Its operating flow was 661 million, which translates into a growth of 4.0%.
Revenues for the last quarter of 2021 amounted to 7,756 million pesos, which represents an increase of 12.6% compared to the same period of 2020. Meanwhile, same-store sales, which have been operating for at least 12 months, grew by 7.6% compared to the same quarter of the previous year.
inflationary pressure
While the sales of the chains during the last quarter of the year were driven by year-end purchases, and sales seasons such as El Buen Fin, inflation has become one of the factors that threatens their growth, at least in the long-term.
For now, department and self-service stores started the year on the right foot and stores with more than a year open grew their sales 20.6% during January, according to data from the National Association of Self-Service and Department Stores (ANTAD ).
For now, consumers are starting to think about putting away their wallets. The Consumer Confidence Indicator (CCI) decreased 0.9% in January, relative to its level in December 2021. Shoppers said the chances of buying durable goods fell 1.3 percentage points relative to a year ago. .
Humberto Calzada, chief economist at Rankia Latam, comments that the pressure on the price of energy, generated by the conflict between Russia and Ukraine, could raise the price of gasoline, and this would generate a higher cost in the transfer of goods, among them food and some durable goods, such as refrigerators or washing machines.
“We could see a negative effect later. We are seeing many increases in raw materials and we are going to see an impact on pockets and people, although they have to buy food and other basic products, could buy less and ration consumption or look for substitute goods”, he declares.
Meanwhile, Marisol Huerta adds that the consumer remains resilient in this first quarter of 2021, despite the rise in prices and the international situation. “Despite inflation, the consumer remains firm and it does not seem that the war generates risk because we are far away and the buyer feels calm about making their purchases, it does not bring any type of pressure, but this does not mean that throughout of the year this effect is maintained”, he declares.
