Hypermarkets are small cities for expansion

Large retailers are targeting smaller cities, with about 130 thousand inhabitants and far from the capitals, to expand its chain of hypermarkets. The change of course was initiated in the last two years, triggered by the high cost of expansion of major centres, combined with the rise of lower-income classes.
Of the 12 Extra flag stores opened by the Pão de Açúcar group last year, for example, eight occurred in small towns. In the case of Walmart, five of the eight shops in this open format last year are in municipalities with less than 140 thousand inhabitants.
"Five years ago, if you asked me if I would go to Paulínia (São Paulo State), I would say that was a very small town. Today I'm already there ", says José Roberto Tambasco, Executive Officer of the retail business of Grupo Pão de Açúcar. Similarly, Rafael Vasquez, Vice President of Walmart Brazil, says that by 2010, the priority of the openings of hypermarkets Walmart was the major centers. Now, that has changed.
The explanation of the networks for this movement towards the smaller municipalities are the high costs that are there in major centers. "The investment in the acquisition of a large campus in the city of São Paulo, for example, is more than double than in a city in the interior of the State", compares Vasquez.