Brazilian Retail News

Year 11 - Issue # 407 - So Paulo, October, 04

th
, 2011
Phone: (5511) 3405-6666
BRAZILIAN RETAIL NEWS 1
10/04/2011
Flvio Rocha, CEO of Riachuelo, one of Brazils
top apparel retailers, considers the leading chains
can more than double their market shares in the
next fve years, as the textile industry has been
fighting against informal sales. According to
Rocha, the consolidation in the Brazilian apparel
retail will rise from todays 4% (considering the top
4 groups) to 10% in fve years, as the tax evasion
has been fought hard by the government, thus
getting the competition feld even.
Po de Acar is awarded as the emerging market retailer of the year
Grupo Po de Acar, Brazils top retailer, was awarded last week as the Emerging Market Retailer
of the Year, during World Retail Awards, in Berlin. The group was awarded due to the changes it made
in its business in the last year, tripling its size and becoming a global benchmark. The awarded case
highlights the development of a multichannel, multiformat and multibusiness strategy by the company
that made the retailer lead electronics and food retail segments and to become the second-largest
online retailer in the country.
Leading apparel retailers to double market share in 5 years
Almost 200,000 Brazilian already own tablets
A research done in nine cities by Ipsos show
the number of tablet users has reached 196,000 in
Brazil, 79,000 of them considered as heavy users
of technology devices, as they also own notebooks
and smartphones. Most tablet users are young
men, between 18 and 24 years-old, well educated.
Online retail sales to grow 36% this year
Brazilian online sales will rise by 36% this year
over 2010, to R$ 18.7 billion (US$ 10.69 billion),
according to an e-bit forecast. Electronics and
computers led sales in H1, followed by health and
beauty, books and home appliances.
Brazilian Retail News
Year 11 - Issue # 407 - So Paulo, October, 04
th
, 2011
Phone: (5511) 3405-6666
BRAZILIAN RETAIL NEWS 2
10/04/2011
Magazine Luiza forecasts two-digit FY sales growth
Supermarkets increase sales by 3.91% in August
Netshoes starts operations in Argentina
The CEO of Magazine Luiza, Marcelo Silva, said
last week, during GS&MDs 14th Latin American
Retail Forum, that the company will grow in the two-
digit range this year. Silva said Christmas sales will
be good, but not spectacular as last year, due
to stronger comparison basis. Now, the retailer is
focusing on integrating its last acquisitions (Lojas
Maia, in the Northeast, and Lojas do Ba, in the
Southeast and South). New acquisition, however,
were not ruled out by the executive.
Brazilian supermarket sales rose 3.91% in
August year-on-year, in real terms, although falling
2.25 month-on-month due to an extra weekend in
July, so reported trade group Abras. Year-to-date
sales have gone up 4.27% over the frst eight
months last year, slightly above FY forecast of 4%
the trade group has made.
Netshoes, Brazils largest sporting goods online
retailer, opens this week its Argentinian branch, in
its frst step of an international venture that may
lead the company also to Mexico. In Argentina, the
goal is to, in the mid term, become the countrys
3rd largest online retailer, the leading in the
sporting goods category. The starting investment
in the venture is around US$ 10 million. In Brazil
Netshoes came in August the leading retailer in
visits with 5.8 million unique users, according to
comScore.
Walmart invests R$ 80 million in Minas Gerais state
Walmart has announced it will invest R$ 80 million (US$ 45.71 million) in Minas Gerais state until
the end of the year to build a supercenter in Uberlndia (the fourth in the state) and to expand its
Distribution Center in Belo Horizonte Greater Area. In the state, Walmart runs three supercenters,
two cash & carry and a warehouse club.
Brazilian Retail News
Year 11 - Issue # 407 - So Paulo, October, 04
th
, 2011
Phone: (5511) 3405-6666
BRAZILIAN RETAIL NEWS 3
10/04/2011
Carrefour ends store-closing program
French retailer Carrefour said it has ended
closing loss-making stores as parto f its restructuring
process. Eight compact hypermarkets were closed
in So Paulo state last week, making total count
goes to 14 stores in one month. Ten of these stores
will be sold, and daily News Valor Econmico said
Cencosud and Zaffari would be interested in them.
The presidente of Cencosud, Horst Paulmann,
sai d the company, Brazi l s fourth-l argest
supermarketer, will grow organically in the near
future, as the purchase of local companies has
become too expensive. Bahia-based Perini chain
will be the focus of expansion, in a move to serve
midclass consumers by offering more affordable
goods. Paulmann has ruled out the expansion to
Rio de Janeiro and So Paulo, Brazils two largest
retail markets, as they are highly competitive.
Instead, the goal is to keep on growing in the fast
growing Northeast region.
Cencosud rules out So Paulo and wants to continue Northeastern thrust
The IAV-IDV index, released monthly by the
Retail Development Institute (IDV), forecast
retial sales will go up by 4.8% in September
year-on-year. Confrming expectations of sales
slowdown, sales volume is expected to rise by
4.7% in October and 5.6% in November, also
year-on-year. Non-durable goods shall drop sales
down, as are expected to rise only by 1% to 2%.
Semidurable goods sales are expected to be in
the 4%-11% range, as the Childrens Day and
Christmas will boost sales. Durable goods will
continue to lead market expansion, growing in the
7%-10% range until November.
Large retailers forecast sales slowdown
Brazilian Retail News
Year 11 - Issue # 407 - So Paulo, October, 04
th
, 2011
Phone: (5511) 3405-6666
BRAZILIAN RETAIL NEWS 4
10/04/2011
Cross Channel is disruptive
Marcos Gouva de Souza (mgsouza@gsmd.com.br), CEO, GS&MD Gouva de Souza
Momentum
Cross channel is the natural evolution of the multichannel concept and puts consumers in the center of the entire market
transformation process, integrating, in a virtuous way, all relationship, promotion, services and sales channels. It is also
disruptive, as it is an innovation that creates a new market or value chain, radically changing everything one knows about
a concept or issue.
This seems to be the best defnition and the summary of what we could see in the next two months in events in Boston,
So Paulo, New York, Berlin and Bucharest, markets very different in their social, economic and maturity levels, but very
close due to the convergence and evolution of information technology.
In Boston we attended Shop.org, the worlds main mobile and digital retail trade show, organized by the National Retail
Federation (NRF). In So Paulo, GS&MD Gouva de Souza organized Digitailing International Digital Retailing Forum
and the 14th Latin American Retail Forum, in August and September, and the last one had, as main theme, the reinvention
of the point of sale in a multichannel environment.
In New York, Goldman Sachs Global Retailing Forum gathered the main global retail executives, with overwhelming
presence of US companies, but also with some representatives of other regions of the world. In Berlin, the 5th World
Retail Congress gathered around 1,000 executives and leaders of global retailers, with strong presence of Asian and
Eastern Europeans, an aspect not so usual in global retail events. During WRC, Grupo Po de Acar was awarded as the
Emerging Market Retailer of the Year. And in Bucharest, Romania, we attended the Ebeltoft Groups H2 meeting, alongside
members of retail consulting frms from 16 countries, being GS&MD Gouva de Souza the only Latin American one.
In the over 100 presentations we were able to attend in all these events, a lot was shown, discussed, debated and
consolidated. Any attempt to summarize what was present would be, at least, foolish, except for the clear perception that
a new age has been born for retailing, marketing and the economy as a whole, with the growth and dominance of cross
channel as generator of deep structural changes in the distribution, consumption and in the society.
The alternatives for the integration of distribution channels for suppliers, retailers, distributors, franchisors, industries
and service providers, to allow them to reach end consumers in an unusual way in a scenario of growing competitiveness,
suffer a deep, structural and defnite change due to the evolution of the multichannel concept, bringing in elements that
open room for the virtuous management of these relationships, leveraging results.
It all would be just small talk if the frst relevant examples were not shining in the global scenario, redefning the awareness
and valuation level of the companies and highlighting the ones that have achieved competitive edges due to their ability
to innovate and lead the changing process.
What seems to be more relevant is that, in this process, companies in very different markets, with different levels of
economic evolution, have been fnding more and more the same solutions, as innovation in business models do not see
the traditional boundaries of maturity and geography and award the enterpreneurs, the untamed, the readiness and the
disposition to create the new. What has not yet been imagined.
The examples, although in more mature markets, sustain this transformation and goes on and on. Amazon expanded
its presence to new categories, incorporating new and innovative products, creating concepts and brands, integrating
other players in this scenario and expanding fast its market range from the simple equation of knowing consumers
behaviors, attitudes, wishes and expectations, monitoring purchases and preferences of the ones relating to them. Thus,
the company expands its presence to categories far, far away from its original proposition of selling books online. By the
way, do you remember Amazon started like that?
Apple evolved adding more and more services and products under the umbrella of a brand that monitors its customers
in its wishes, choices and behaviors and uses this information as a cornerstone for product launches and promotions,
segmenting the market from this behavior and stablishing one-of-a-kind relationships in its online and brick-and-mortar
stores and in its own products. This way, the company creates an unique virtual relation, without the interference of any
other economic agent. Thus leveraging margins and results.
The history of winners in this new disruptive scenario started being written now and comes from an understanding
that has as premises an approach of the present and the future way beyond the past winning realities and perceptions. It
demands a level of boldness usually not available in the companies organized under todays management and business
paradigms.
This is something to challenging to be treated on these weekly articles, but justifes a deep immersion in the study of the
elements that transform the future reality and create opportunities or threats to todays businesses. One cant ignore it.
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