Pão de Açúcar network grows less

Operation that originated the Grupo Pão de Açúcar, supermarkets that carry the company name became a reference of this food retail format in the country. Store model that pulled the company's growth in the biggest crisis in its history, in the years 90, the operation ended up getting more to the Group's expansion plans in recent years. Pão de Açúcar stores expand organically so slower than other networks. And between 2008 and 2012, only in 2011 the retailer grew at a rate above the average for the Food balance sheets, according to GPA last 5 years.
What could generate a certain discomfort ends up being justified by the group for reasons related to the format of the network and its own history. The sugar loaf is store more mature model. And what suffered less adjustments in recent years. With this, did not have the sale bolstered by deeper changes. Retailers who suffer restructuring tend to grow after the adjustments. "This is not the case. The Sugar Loaf (Pão de Açúcar) is the Crown Jewel of the group, has a format that grows ever, but less than the other brands of the company faced changes, "says Manoel de Aguilar, a partner at retail consulting Martinez de Aguilar.
With $ 5.1 billion in net revenue in 2012, up 8.9% on the previous year-in 2011, grew 10.5% and in 2010, 12.8%-, the Sugar Loaf (Pão de Açúcar) has to live with the limitations of the model, which also helps to understand certain numbers (see table). It is not a sugar Bread store in any place-the flag was created to meet the highest income public. And even if fit, would have to pay a high price for it. You would need to occupy spaces in neighborhoods or richest cities where the price of square meter was inflated in recent years. "We don't have a concern with the network. Is that the opening of stores is even more difficult, "says Jose Roberto Ortega, Vice President of retail business of the GPA.
"If we could inaugurate a 20 year stores of the Sugar Loaf (Pão de Açúcar), we would love it. The Aeneas [Pestana, President of the GPA] would not make any objection. What happens is that we do not have land to do so. Sometimes we hope years by a point with acceptable price and good location ", says Tambasco. Asked about the greatest pressures of competition, entrepreneurs who have opened shops and emporiums in recent years, the Commission states that the market share of the network is stable.
Nielsen data calculated by the value show that, over the past 12 months, the market share of net sales (in value) in the country has been between 5.7% and 5.8%. That is, without opening as many stores, the network maintains the participation in a growing industry. However, the balance sheet numbers show decline in productivity index. The sale by square meter of network grew 4.8% in 2012, 6.4% in 2011 and 9.3% in 2010.
Ends up being easier and cheaper open an Extra Supermarket, for example, with smaller profit margin per area, but that has brought results and cost of opening that is equivalent to about 5% of a sugar loaf. While the Sugar Loaf (Pão de Açúcar) sum 165 supermarkets today, with average of 5 stores per year, the supermarket has about 120 and opened 12 stores only in the first quarter.
There is an expansion project for Sugarloaf in new parks, where there are signs of expansion of the upper classes, especially in the Midwest. Cities such as Campo Grande (MS) and Goiânia (GO) are in the project of opening in 2013/2014 period. Belo Horizonte (MG) is also among the priorities. This year should be inaugurated six units of the flag and 20 others will be reinaugurações. Only three openings in 2012 and three in 2011.
Tambasco notes that to open supermarket Pão de Açúcar stores, you must have a distribution system that caters new squares. It makes no sense to open a single store in a city far away and difficult to access. Even if the company use the Extra Hypermarket structure for these regions, would not solve any problem. Is that the Sugar Loaf (Pão de Açúcar) sells many products that do not exist in Extra or in Assam. Would need to set up a new structure for delivery of the goods.
"Despite this, we are planning on using the Extra system to meet new Pão de Açúcar stores in cities where there will be the two networks, and think of a solution for delivery of products which only go to the Sugar Loaf (Pão de Açúcar)," he said. This is explains Tambasco, because the company has expanded the area of Rotisserie and bakeries in new stores, and to split the sale by film, the result does not grow so much. "But the margin per square meter, which is what matters," he says, because these areas sell more profitable products.