With resumption of retail, GPA plans to invest $1.8 billion in 2019 R

The Grupo Pão de Açúcar (GPA) back to accelerate investment in food retail next year. To 2019, the company intends to apply R$1,8 billion on expansion of atacarejo (Assam), Sugar Loaf, proximity and stores, mainly in technology to support the advancement of e-commerce. In the last four years, the average annual investments of R $1.4 billion had been. This year, until September the contribution was R $1.1 billion and it is expected to reach R $1.6 billion until December. The investment acceleration occurs after the House have been placed in order. With the crisis, the GPA decreased spending and failed to expand in some formats, focusing especially on the network that gave more return, atacarejo. "We are living a moment of alignment of the stars," said Ronaldo Iabrudi, Vice President of the Board of Directors of the GPA. According to him, today all the Group's businesses are doing well. For Peter Estermann, President of retailer, 2019 year is much more positive than the current. "There are a number of initiatives that everyone waits. Reforms, reduction of interest rates and unemployment will increase consumer confidence, "commented. For him, it is necessary to observe the actions of the new Government during the first 180 days to figure out if those expectations are confirmed. Next year, the company should resume investments in expanding the network of supermarkets which gives its name to the group, the sugar loaf. The flag has not been in the focus of investments in recent years, but now must win between 5 to 10 new points of sale in 2019. In the long run, the bet is even greater: the GPA wants to open 100 new stores Sugar Loaf over the next four years. "Let's take the organic growth in the premium segment," says Estermann. For Edward Land, President of the Brazilian Society of retail and consumption (SBVC), the fact the company planning the opening of shops with the flag Sugarloaf shows, in fact, that the company believes in the retaking of consumption next year. That's because the network is already in Sugar Loaf squares. When the crisis came, the company chose to take the walk of this flag and bet on expansion of atacarejo that was more appropriate because the consumer was with the tighter pocket and this store format has as central point the discount in price. Even with greater focus on your flag more premium, the Group intends to keep the pace of expansion of the Assai, opening between 15 to 20 stores compared with a total of 18 planned for this year. In the segment, the network of small shops Minute Sugarloaf will also earn more 10 to 15 new units. The optimism of the GPA shown still in belief that the retail brands will grow above inflation. In 2018, it is anticipated that only the Assai achieves this goal. For the flags of the Multivarejo, business unit that includes the Extra and the sugar loaf, the expectation this year is just growing revenues in the same discretion online stores with food inflation. Part of the confidence in recovery of Multivarejo has been improving sales of Extra network. The hypermarkets, which were a source of concern especially in the height of the crisis in 2015 and 2016, grew back. "The consumer migration to the hypermarket atacarejo was significant, but Brazil won't be in crisis my whole life," said Estermann. Another network of stores problematic for the GPA are Extra supermarkets. In this business, the company decided to start reforms and store conversions. Some of the outlets is turning on the flag Buy Well, dedicated to dispute market with regional supermarkets, and another part in Extra Market. The revitalization has helped retrieve sales, said President of the GPA. The recipe of supermarkets that have turned into Extra Market is 25% higher than that of other unprocessed stores. In 2019, a part of the investments of the group will go to these conversions. Will be 30 to 35 stores turned into Buy Well and other 50 to 60 turned into Extra long term Market Estermann is even more excited about the prospects for the long term. He believes that the GPA prepared to make even more aggressive expansions of their banners in the future and that this can occur as early as 2020. The network Sugarloaf is an example: can accelerate in 2020 the expansion beyond the Southeast region of Brazil. Other vector of growth in the long run are the mini-markets. According to him, the company has adjusted the template and could quickly open a few hundred shops from 2020./COLLABORATED SHIE CHIARA