Walmart Brasil has announced plans to convert its hypermarkets into cash and carry and membership-only retail warehouses.
As a part of the plan, it will convert 10 hypermarkets to the 'atacarejo' (cash & carry) format under the banner Maxxi Atacado, and another ten to Sam’s Club by the end of 2020.
Last week, the retailer opened its first converted Maxxi Atacado store in Diadema near São Paulo.
It has a sales area of 3,300 square metres and a larger check-out area.
The store offers a wide assortment of around 6000 items, of which 2,500 are new products.
Other novelties in the outlet include the in-store Wi-Fi, illuminated shelves, LED backlight panels, and modern cashier equipment.
The aim is to attract consumers who make large purchases of supplies for their homes and small trade.
A Logical Move
The retailer’s bet on 'atacarejo' seems like a logical move, as the store format has seen the highest growth in 2018 (+12.3% in volume), according to Nielsen.
Medium-sized supermarkets grew by 3% and e-commerce by 12% during the same period.
Around 60% of Brazilian households (31.6 million) make monthly purchases from cash and carry stores.
One of the factors which contributed to the popularity of the channel was the dynamics of store openings, which increased by more than 50% since 2015.
Out of 130 hypermarkets, Walmart Brasil plans to remodel 50, while 270 supermarkets will receive investments in a second phase of the retailer's business recovery plan.
Walmart also plans to cease online sales as it corresponds to only a tiny percentage of the company’s total sales.
The decision was motivated by the 'reformulation of the [company's] digital strategy', which aims to integrate physical and online sales to a 'multi-channel approach,' the company said.
In the future, the company will focus on wholesale, the purchasing club and physical retail where it sees 'enormous growth potential'.
In June of last year, private equity fund Advent International took ownership of 80% of Walmart's operations in Brazil.
In the Latin American country, Walmart is the third largest retailer after Grupo Pão de Açúcar and Carrefour Brasil.
© 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.