Brazilian retailer Grupo Pão de Açúcar (GPA) has announced plans to invest up to R$1.8 billion (€421.7 million) in 2019 for expansion and optimisation purposes.
The retailer aims to focus on higher-return projects and strengthen its regional performance.
Its cash and carry banner Assaí, which saw an improvement in sales volume and customer traffic during 2018, will see the opening of 15-20 new stores this year.
Assaí expects same-store sales growth of roughly 2% above inflation, and total sales growth of over 20%, the company said.
EBITDA margin should expand by around 0.3% to 0.4%, driven mainly by the performance of stores opened in recent years.
In the retail (Multivarejo) segment, GPA forecasts same-store sales growth of roughly 1% above inflation.
The EBITDA margin is expected to increase by 0.3%, driven by the optimising and reposition of its portfolio at Mercado Extra and Compre Bem, and operating efficiency gains.
The company will also continue store renovations and expansion of its premium supermarket banner Pão de Açúcar.
In the proximity and specialised businesses, at least 15 stores will be opened.
GPA will also move ahead with its plan to modernise drugstores, and expand gas stations.
Work will also continue on the renovation of Mercado Extra stores and conversions into Compre Bem, resulting in around 100 renovated and converted Extra Super stores.
In the digital transformation segment, GPA will focus on innovation and acceleration of its omnichannel strategy to offer customised solutions to customers.
Loyalty apps Cliente Mais and Clube Extra should see a significant expansion of the active customer base, the company pointed out.
The retailer aims to maintain leadership in food e-commerce by accelerating its pace of growth, improving the conversion rate of orders, and achieving operating efficiency gains.
The 'Express' and 'Click & Collect' services at Pão de Açúcar will be strengthened and expanded to over 120 Extra stores by the end of this year.
Online Subscription Service
Cheftime, the online subscription service and sales of gastronomic kits, will be rolled-out across 30 Pão de Açúcar and 3 Minuto Pão de Açúcar stores, with continued expansion across the metropolitan area of São Paulo.
GPA will also expand its delivery services through the James Delivery application to the city of São Paulo in Q2, and to 10 more cities by the end of the year.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine.