Santiago-based Universidad de Chile. “These stores fulfill immediate needs and are not the principal source of groceries. But in Chile they account for 5 percent of supermarket sales.”
Many of Latin America’s convenience stores are in gas stations. “Our market’s sales are tied to the growth of the gross domestic product, and these years have been quite good,” said Miguel Angel Avendaño, general marketing manager for oil company Shell Caribbean and Central America, from his Guatemala City headquarters. “This market shows great growth potential in our region.”
Central America alone boasts 850 convenience stores at fuel stations, operating under such brands as On the Run, Select and Smart. There are 99 gas-station-based convenience stores in the Dominican Republic. Chile’s 622 convenience stores (not just gas-station-based) include the Pronto Copec chain (owned by Compañía de Petróleos de Chile), Shell’s Select chain and the Va y Ven chain (owned by the Organización Terpel fuel distribution company and relaunched this year following a $20 million revamp that includes Wi-Fi). Brazil, South America’s biggest country, had roughly 7,000 convenience stores at the end of last year, the bulk of them at gas stations.
“We are projecting 1,000 new convenience stores will open in the Brazilian market this year,” said Claudio Correa, a convenience store analyst at Rio de Janeiro–based Fecombustíveis, Brazil’s fuel station trade group. “Ours is relatively small because of the competition of bakeries and small supermarkets, but the increase in consumers’ income is making the market more attractive. Traffic bottlenecks in our cities have stimulated the convenience market as people look to shop closer to their homes and offices.”
This retail niche is particularly promising in Latin America, says Leonidas Oyaga, a Colombia-based retail analyst covering Latin America for The Partnering Group, a consulting firm based in Cincinnati. “If you want to compete with big retailers like Cencosud, you have to do it through small and efficiently run retail formats,” said Oyaga.
Traditional retailers are taking an increasing interest in the format, which in most countries has been controlled until now by fuel stations and the traditional neighborhood bodega or minimarket. Gamaexpress belongs to the Excelsior Gama supermarket chain. In Brazil supermarket giants Carrefour Brazil and Grupo Pão de Açúcar have entered the market. There are now 100 Carrefour Express stores in Brazil, with 38 more scheduled to open this year. Grupo Pão de Açúcar launched the Extra Perto convenience store chain last year to compete with neighborhood markets, Correa says. Brazil-based retail group Lojas Americanas owns the Americanas Express convenience store chain.
In Mexico, Latin America’s second-biggest country, the number of convenience stores has more than doubled during the past seven years, says a Nielsen Mexico study. There were about 7,000 stores in 1999 and roughly 13,000 in 2006. Such international players as 7-Eleven and Canada-based Couche-Tard’s Circle K Stores are in Mexico, but the lion’s share of the market belongs to Monterrey,

Mexico–based Oxxo, Latin America’s biggest convenience store chain. As of March Oxxo was operating about 5,600 stores in Mexico, with plans to roll out an additional 800 annually between now and 2012. It is set to enter Colombia next year.
“Our sales grew 13.3 percent during 2007, making us one of the main business segments of FEMSA,” said an Oxxo executive who requested anonymity. FEMSA is the largest beverage company in Mexico and Latin America. Its Mexican holdings include a majority stake in Coca-Cola FEMSA and ownership of FEMSA Cerveza, which in turn owns Mexico’s second-largest beer brewer, Cervecería Cuauhtémoc Moctezuma. “The growth of convenience stores throughout the country will continue, thanks to factors like changes in family roles, less time to go shopping and [the] types of products and services these stores offer,” the executive said.
Circle K has about 100 stores in Mexico currently, with an eye to opening about 30 more this year through franchisers. “There remains a tremendous amount of consolidation in our industry, and we are focusing our efforts in developing North America,” said John R. Patton, Circle K’s director of international franchise. “We will continue to concentrate more effort in Mexico.” (The company is also active in Asia.)
There is great potential for further convenience store growth in Latin America, says Guillermo D’Andrea, who teaches business administration at the Universidad Austral, in Buenos Aires, Argentina. “Latin America’s small retail operators, particularly neighborhood grocery stores, have weathered the retail evolution staged by the big retail chains since the 1990s,” D’Andrea said. But the time is ripe for chains to take over this niche, he says, and turn it into “a more professionalized format.”
Prospective investors must keep in mind, however, that what works elsewhere does not necessarily apply in Latin America’s convenience sector. In most Latin American countries, cards for prepaid cell phone minutes are a main seller, for example. Hot food, and not cold sandwiches, are a must at Chile’s convenience stores, while in Brazil, consumers look for the traditional cheese bread, coffee and sit-down accommodations. Prepared food and coffee comprise 15 percent of convenience store sales in Brazil, beverages and beer account for 30 percent, snacks and candies make up 20 percent, and cigarettes bring in 15 percent, according to Correa.
In Colombia where there are no major convenience store chains at present, neighborhood stores are popular for one key service: they deliver. “People call their neighborhood store and ask for immediate delivery of a missing product,” said Oyaga. “More convenience than this does not exist.”

Supermarket sales have been growing at breakneck speed over the past year amid robust domestic growth and expanding credit availability. Abras forecasts sales will grow 8% in 2008.

“But we won’t manage to maintain that pace of growth in 2009,” said Sussumu Honda, Abras’ president, at a press conference in Sao Paulo on Tuesday.

He noted that Brazil’s banking system remained solid in the face of the crisis that hit U.S. banks but the country won’t be immune from the real economy fallout.

Meanwhile, the Brazilian Central Bank has been raising interest rates this year and this will start clipping demand in the future, said Honda.

The benchmark Selic interest rate currently stands at 13.75% after starting the year at 11.25%. According to a central bank market survey, the rate is expected to reach around 14.50% by the end of the year.

“Revenues are currently being driven by rising real incomes among Brazilians, which is going directly into consumption. This trend could turn with greater restrictions on credit,” he said.

In the first eight months of 2008, Brazilian supermarket sales were up 9.4% compared with the same period of 2007.

Brazil’s largest grocers are Companhia Brasiliera de Distribuicao (CBD), or CBD; France’s Carrefour SA (12017.FR); and U.S. retail titan Wal-Mart Stores Inc. (WMT). French retailer Casino Guichard Perrachon SA (12558.FR) owns a 35.3% stake in CBD.

If you would like to see a photograph for any of these stores please visit our galleries.

Noddle also said that the company’s stores that have been remodeled as part of the Premium Fresh & Healthy program are generating good results with healthy sales increases well above overall identical store sales growth. Noddle said, “We are pleased with our early remodel performance and plan to maintain our commitment to the important remodel program, increasing our major remodels in fiscal 2009 to 165 stores, up from fiscal 2008’s 125 store remodels.”

Source: morningnewsbeat.com

Hannaford can’t afford them on their own, but Delhaize certainly could, specially if they bring Euros back to the US.

Competitive issues?  Yeah, there is some overlap, but they can divest some stores.

Kroger could do it as well. They are sitting on a lot of money and are not as leveraged anymore.

A big acquisition like this would definitely give investors some confidence in what is already setting up to be a shaky 2008.

Check out video here:

http://www.youtube.com/watch?v=3OBANZ2PXaE&e

Safeway’s stores provide a full array of dry grocery items tailored to local preferences. Most stores offer a wide selection of food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral and pharmacy. In addition, many stores now offer Starbucks coffee shops and adjacent fuel centers.

Safeway continues to operate a number of smaller stores that also offer an extensive selection of food and general merchandise and that generally include one or more specialty departments. These stores remain an important part of the Company’s store network in smaller communities and certain other locations where larger stores may not be feasible because of space limitations and/or community needs or restrictions.