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ILACAD Takes an In Depth Look at the Retail Food Market in Latin America |
 In 1997 Frédéric Gautier founded the Latin American Institute of the Channels of Distribution (ILACAD), a private institution dedicated to review the evolution of retail in Latin America and the product markets of mass consumption. ILACAD has offices in Argentina, Mexico, Brazil, and Guatemala and operates in 8 Latin-American countries to provide its retail market vision and best practices expertise to approximately 300 Retail and FMCG clients. Take a closer look as Mr. Gautier explores this compelling market. |
The retail food market is one of the most important formats in Latin American, representing one of the largest segments in attendance at RETECHLA. Frederic Gautier is regarded as one of the leading researchers in the Latin America retail market. His studies on the retail food market focus on the various formats and significant trends in Mexico, Argentina and Brazil with lessons learned about these different types of formats.
In 2007 the Latin American economy grew 5.6%
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Concentration of the top three chains per country
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Hypermarkets and grocery stores converge the same amount of
customers per POS
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In 2007 the Latin American economy experienced a 5.6% growth as portrayed in the following map. According to Gautier this growth is evidenced by the investment to
expand retail operations, “In 2007 more than $8 billion has been invested in the Latin American retail sector. With $2.2 billion of investment, Cencosud is the retailer that most invested in acquisitions in 2007 and Wal-Mart opened 212 stores in Latin America in 2007.” Of the top ten food retailers in 2008, Wal-Mart, a long-standing ADT customer, ranks as number one in Latin America. With over 3,200 stores in thirteen markets outside the continental U.S., known for providing customer service and convenience to customers in their local communities, Wal-Mart has over 1,950 stores in Latin America. Further analysis reveals the concentration by country of the three top retail chains as depicted in the following map. In the retail environment store formats range from “max” to “mini.” With those varied formats come differences in the total store floor space, product assortments and most importantly the concentration of customers frequenting that format. In the case of the Mexican market for example, there is a mix of formats from max to mini.
A snapshot of the customer penetration per point-of-sale (POS) in the following diagram indicates hypermarkets, grocery and membership clubs have the largest saturation; while hypermarkets and grocery stores have an equivalent amount of customers per POS. With a large population of customers frequenting these varied formats that offer some of the most frequently shoplifted items like cosmetics, food, apparel, electronics and more, retailers need to consider loss prevention technologies that improve both security and operational efficiency.
Mexico’s top three chains, Wal-Mart, Soriana and Comercial Mexicana all rely on ADT to provide the security solutions suited to protect their type of environment. With over 1,079 stores in Mexico representing the largest number of all stores in Latin American, Wal-Mart protects their stores with integrated security solutions including Sensormatic Acousto-Magnetic (AM) EAS systems complimented by AM Source Tagging, American Dynamics CCTV and Software House Access Control systems.
Soriana self-service hypermarket centers, with an assortment of almost every product line, helps control internal theft and vendor fraud with American Dynamics® CCTV systems - respected as a leading global brand of video security technologies. With a retail footprint of 410 stores in all Mexican Republic and annual revenue of $5.9billion USD, Soriana launched their new super format called “Soriana Super.”
With retail footprint of 217 stores and 73 restaurants in 42 cities throughout Mexico and annual revenue of $4.6 billion USD, Comercial Mexicana protects its new City Market gourmet food stores with the high performance Sensormatic Ultra•Max®
anti-theft technology.
Other Mexican retailers such as Palacio de Hierro, with 10 stores in Mexico, Guadalajara and Monterrey and annual revenue of $1.1 billion USD; as well as Liverpool, with 71 stores in all Mexican Republic and annual revenue of $3.9 billion USD protect their stores with Sensormatic Ultra•Max EAS systems. With an unparalleled detection rate to protect all types of products, Ultra•Max offers these food retailers the ability to detect to security tags inside foil-lined bags, metal shopping carts or tagged products containing non-ferrous metal – products most commonly shoplifted that Radio Frequency (RF) systems cannot adequately protect.
Both Chedraui, with retail footprint of 120 stores, and Farmacias San Pablo with a retail footprint of 23 stores in Mexico, integrated American Dynamics CCTV along with Ultra•Max EAS systems for an added layer of protection.
Éxito, a leading retail chain with 273 stores in 45 cities throughout Colombia, has relied on ADT over the past 10 years for their security and loss prevention needs. To help protect their high-risk, high-value items such as bottled wines and spirits, Éxito deployed the Sensormatic Ultra•Tag for its ease of application and detachment -- saving Éxito store personnel significant time in protecting stock. Capable of shielding a wide range of merchandise, the multipurpose Sensormatic Ultra•Tag offered Éxito enhanced productivity and greater security to help cut theft of bottled wines and spirits by more than 80 percent.
As the retail food industry in Latin America continues developing new formats and services to keep pace with the continued growth, retailers can refer to the research information from ILACAD when considering the investment in new LP technologies.
For more information on ILACAD, visit www.ilacad.com.
For more information on Sensormatic solutions, visit www.sensormatic.com.
The comprehensive American Dynamics Intellex Ultra digital video management system captures high resolution image, delivering value,
performance, reliability and integration capability to retailers.
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