Thursday , October 21 2021

In this way, Grupo Rey's competition operates in retail in Panama


Author: Daniel Zueras and Luis Sierra,

They deal with informal or semi-official companies (over 15,000 companies of different ethnicity and formats) that sell 55% of the estimated $ 8 million in annual sales estimated in this sector.
"Competitive, more diverse, increasingly specialized, but with opportunities for those who adapt and know how to offer customers a good product," says Muntaner, the retail sector in Panama.

Read also: Grupo Rey, the monarch of the gondola in Panama

This market is special: large retailers are opening up more square meters for a market that is not growing at this rate.

According to Grupo Rey, CEO Hernán Muntanera, it will be increasingly competitive, "but we think it will be a great opportunity to reach with better prices and better quality products to places in Panama, where there is not even this kind of surface. "
In addition, Muntaner says that some international groups and networks are coming. "The competition enjoys – we believe – makes us better and more profitable for consumers", such as the Chilean investment group that has invested in Grupo Extra, or the landing of Justo y Bueno, a small format network that already has 18 stores

Whenever Walmart arrives in the country of overflies, because Panama is the only country in the Isthmus where there is no presence. It's possible, "I do not deny and we do not know anything can happen," Walmart said. "However, he believes that retail is very local, where customers buy their favorite brands.
"In the case of Panama, a very good part of the brands sold are local brands, there will probably be some kind of mergers, acquisitions, international players' arrival.
On the other hand, there is a growing number of small, family-owned companies that grow and become formalized.

Also read: What are the supermarket brands in Top of Mind of Central America 2018?

These are the main brands of supermarkets present in the Top of Mind of Panama:

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So how do you develop in a market that seems more and more saturated? Héctor Muntaner focuses on what they know in Panama as "los chinitos", small informal stores in the neighborhood run by Chinese citizens. "I think this is a great opportunity because the informal channel is still very weak." These companies operate in those districts or cities where people need low prices the most, but in the most expensive formats.

He acknowledges that the formal market in the city is partially saturated, but "we believe that there is a great, wonderful opportunity to reach places where we have not arrived."
This opportunity for Rea would come "thanks to logistics improvements, construction, purchasing and operations, you can create formal formats, socio-economic neighborhoods of CDE, with better quality products and lower prices," says the Executive Director.

The company changes by leaps and bounds. Inside and outside Panama. "We've seen many improvements from our competitors, improved sales levels."
But changing the surface is not the only one. Electronic commerce has become a disruptive factor in retail trade. This is undeniable and is already happening in Panama, Central America, and around the world. More and more products are consumed by the customer via the Internet, with various forms of delivery. "There is already Amazon and various global competitors who come with products in Panama," says Muntaner.

In any case, CEO Grupo Rey is convinced because "our business is food, and above all perishable products", namely, seeing the strategies of these giants in countries much more mature and more penetrated in e-Comverce "I think that the last bastion where it will penetrate and grow quickly will be in perishable products because people like to buy tomato and lettuce in a physical form. "

Of course, there will be more and more purchases and electronic penetration. In the case of Grupo Rey, this is not yet a concern. "Yes, we are going to participate, but as long as the market demands it."

PwC data is clear in e-commerce. China is a big global reference point in e-commerce: 73% of consumers buy it online every week. The delay in the region is significant.
According to the consulting company Kantar WorldPanel, in the first half of 2016. Only 7% of Central Americans made online purchases during these six months, with the leaders of Costa Rica (12%) and Panama (8%). ILifebelt estimates show that in the first semester of 2018 there were 22 million people in Central America.

Grupo Rey Panama-DSC06208 (800x600)

Anyway physical stores will not disappear. Currently, 90% of global retail sales takes place in physical stores. Yes, everyone should adapt, including grocery stores, says Deloitte in his report "Global seller rights 2018", which in some countries is already switching from suppliers of goods to service and solution providers, with food, health and well-being "approaching commercial environment ". Some already have health clinics, dieticians, nutritionists and even gyms in their space.

The Deloitte report identifies four major global trends: designing and building first-class digital skills; combine online and offline sales; create unique and interesting shopping experience in physical stores; and renew retail through the latest technologies.

Euromonitor International notes that the retail industry in Latin America has seen a 7% increase in 2017; and on 2022 expect an annual increase of 3%. From this global market research company, "Latin American retail has had to face some format changes in which the novice sells internet connections to re-understand the consumer." We observe a consumer who is concerned about increasing the value of each ticket issued, which looking for offers and adapting to them their purchases, which do not maintain loyalty to brands and sellers and are not afraid to question them regarding matters that are important to him ",

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