GPA launches partnership with small business and retail of proximity

The GPA is launching the brand Allies CompreBem, which can be used by small independent retailers. The idea is to sell products to those stores, mainly of own brands. With the new model, announced today (28/07) during conference call with investors, the company expands its activities in the vicinity. The program is intended for 150 units to 300 square meters. According to the company, it is not because there is no franchise fee collections, such as royalties and other. The initiative was inspired by the Successful model, which belongs to the Casino in Colombia.
"We are the first national retailer to offer this model to the market. Our idea is to share knowledge and improve the business of small traders, "said Luis Moreno, CEO of Multivarejo, a division that collects the Extra marks and Sugarloaf. In this model, the GPA is responsible for the submission of applications in stores and the brand and visual change on the facade.
According to Marcelo David, Executive Director of the business group''s proximity, quality and quantitative research was carried out with consumers in which the mark CompreBem had good grip both class A/B as C/D ". The project began in April last year with 10 to 20 establishments and now has 46. "We are using the learning success, but adapting the business to brazilian culture," he said.
Proximity shops – including the flags Minute Pão de Açúcar and Extra Mini-21.4% nominal grew in the second quarter of this year as compared to the same period in 2015. With this, achieved net revenues R$ 280,000,000. The segment represents 1.4% of the total sales of the company.
Food Division in the Red
With net loss of 109,000,000 R$ in the second quarter of the year, the Food felt impact GPA reduction in gross margin and increase of expenditure in the period. The Multivarejo, for example, recorded a 1.6 percentage point drop in gross profit margin, net effects of tax credits, as compared to the same period in 2015. The main reason for the decrease are the efforts of competitiveness concentrated in the Extra flag. They translate promotions "1, 2, 3 Steps," which offers progressive discounts; "Hyper", with supply of perishables all week; and "the cheapest", which offers 300 SKUs of lowest price on the market. According to Moreno, these initiatives are already turning into increased sales and market share gains, which are expected to intensify in coming quarters. The Executive stressed that these measures bring other benefits such as cost optimization and reduction of costs and logistics. "There was an increase of 8% in Extra productivity, measured by sales divided by the number of hours worked," commented.
Even in Multivarejo, the selling expenses General and administrative, grew 7.9% between April and June this year-below the inflation for the period. Among the most influential such high points are increased to 10,000,000 R$ due to the opening of 41 stores in the last 12 months, R$ growth with higher provisioning 53,000,000 labor contingencies and increased defaults on rental receivables from commercial galleries. The impact in this case was R$ 20,000,000.
On the other hand, the Division remained practically stable expenses of stores-slight reduction of 0.1%. This is due to efficiency projects implemented at the end of last year and in the first half of this year. The initiatives include decreased spending on marketing ( -11.5%) and with store personnel ( -1.5%). The Mutivarejo net sales reached 6.4 billion R$ in the second quarter, which represents a nominal 1.8 percent fall.
With nominal growth of 36.9% in net sales, the gross margin remained stable your Assai (13.8%), excluding effects of tax credits. The cost of sales, General and administrative had 0.3 percentage point reduction. This is due mainly to greater control on expenditure and operating leverage.
Ronaldo Iabrudi, President of the company, said during the Conference call that there is still improvement opportunities. "There are possibilities for fine-tuning," he said. He claimed to be optimistic that the company resumed the growth path – the Food, for example GPA, grew 11 percent in the second quarter. "The team has a strategy and a plan whose implementation makes us confident," he added.