Small Format Grocery Stores - Brazil - February 2014
“In Brazil, small format grocery retailing, which consists of gas station convenience stores, minimarkets, and bakeries, has a strong convenience positioning. Retailers can succeed in the segment through outlets that are well-located, with good presentation and a limited range of products of good quality and price.”
– Jean Manuel Gonçalves da Silva, Senior Food Analyst
This report will discuss the following questions:
- What are the main characteristics of the small format grocery store segment and the operators?
- How do consumers perceive the small format grocery store channel in Brazil and what are their expectations of it?
- How can gas station convenience stores increase shopping frequency among Brazilians?
- Which aspects of the stores and their product offerings can attract more local shoppers to convenience stores and minimarkets?
- How can strategies targeting the female public have a positive impact on increasing shopping frequency in convenience retail?
Small format grocery retailing in Brazil is broad and consists of gas station convenience stores as well as other channels not formally designated “convenience,” such as minimarkets and bakeries. The latter is the channel most frequented by Brazilians. This is traditionally driven by purchasing fresh bread, facilitating the purchase of other food items for home, as well as snacks.
Minimarkets also enjoy substantial market penetration among shoppers. Characterized by a large presence of independent establishments, the minimarket segment is now seeing minimarket chains such as Dia% and Minimercado Extra expand rapidly, demonstrating the potential of leading chains in the segment.
Gas station convenience stores are the convenience channel with the lowest market penetration among shoppers. While Brazil’s largest gas station brands are present in the segment, the store number remains low at just 6,904.
Store brands could be well-placed to tap into the high importance of quality and price to shoppers even in the convenience channel. Dia%, for example, already operates in Brazil with a product offering that consists of 30% of store brands. Furthermore, small format grocery store chains could take advantage of their stricter standards for tidiness to appeal to the more than half of the small format grocery store shoppers concerned about these aspects.
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