Liverpool, Palacio de Hierro and Grupo Sanborns already face some challenges heading into the new year. Although department stores had a streak driven by the return of customers to stores, the outlook has darkened as Mexicans have moderated their spending in recent months, given the unexpected arrival of the omicron variant and skyrocketing inflation. .
“Inflation and problems with supply chains have made products more expensive and have slowed this recovery for department stores and we continue to see complications towards 2022 due to all economic factors, such as inflation,” says Humberto Calzada, chief economist for Rankia Latin America.
So far, the signs were positive. From January to November, the department stores and supermarkets that make up the National Association of Self-Service and Department Stores (ANTAD) reported sales of 1,169 million pesos, an increase of 1.3% compared to the same period in 2020, when they amounted to 1,153 million of pesos.
Sales from January to November of the associates, including Liverpool, Palacio de Hierro and Grupo Sanborns, were 5.3% below the levels of 2019, before the pandemic, when they billed 1,235 million pesos. But the increase in the prices of some products, may blur the recovery achieved in 2021.
Although each of the chains has a particular case, in the third quarter of the year, the commercial income of El Puerto de Liverpool, which also owns the Suburbia stores, increased 8.7% compared to 2019. Sales of stores with more than a year of operation of Liverpool grew 9.2% compared to the same quarter of 2019, according to the data of its latest financial statement.
At a consolidated level, that is, from January to September, the group’s income grew 38.9%, adding 94,953 million pesos from the 68,384 million pesos in the same period of 2020. Compared to 2019, when they invoiced 93,278 million pesos, the increase is 1.8%.
Grupo Sanborns, which considers the Sears, Sanborns, iShop and Mixup stores, from January to September reported sales of 34.690 million pesos, which compared to 24.635 million in the same period of 2020 is an increase of 40.8%. Compared to the 35,518 million pesos in 2019, the decrease is 2.3%.
Palacio de Hierro is in a position similar to that of Carlos Slim’s stores. The departmental and despite the fact that in the third quarter, commercial income grew 32% compared to 2020; and 15.5% compared to 2019, in the accumulated of the year, still had a gap to close compared to the 2019 figures.
The Bailléres family company had a turnover of 23,095 million pesos in the first nine months of the year, which meant an advance of 44% compared to 2020, The gap compared to the same period in 2019 was short, only 2% below the 23,560 million of pesos in sales.
For now, a pause in performance due to the fact that Mexicans will have less cash for purchases, in addition to the possible setback in consumer confidence, departmental departments will have to wait before overcoming the crisis that generated COVID-19, according to The experts.
“The departmental departments had two encouraging quarters, but now the brakes are going to be put on hold and we estimate that we will face a slight stagnation in growth for two or three quarters, and already in the last part of the year, according to economic indicators, we will see a recovery”, estimates Julián Fernández, Chief Analyst at Leag Academy.