Brazilian retail group GPA is planning to open 50 new stores under the Mercado Extra format by the end of 2020.
The new supermarket format, launched two years ago, already boasts 100 stores across six states. It was rolled out as part of a strategy to convert all Extra supermarkets to Mercado Extra. The Extra banner will remain in use for the hypermarket, drugstore, neighbourhood, gas stations and e-commerce formats.
According to GPA, the Extra Super stores that have been converted to Mercado Extra have seen a double-digit growth in sales volume and a significant evolution in the number of customers, with consistent gains in market share.
In the first year alone, sales growth in these units surpassed the 20% mark, according to the retailer, and further growth is expected in 2020. By December, other stores will be adapted to the new format, including the first in the Northeast region.
Among the factors for the success of the banner are the focus on exclusive private label brands (especially Qualitá), which account for 16% of sales.
Each store consists of two sections – the Rua do Comércio, similar to a grocery store, with pantry products and basic food and non-food items, and the Rua do Mercado, which offers fresh fruits and vegetables and a personalised service in the Butcher and Bakery sections.
Due to increased demand for online purchases during the COVID-19 pandemic, GPA is accelerating its plan to integrate all of its retail units into the Extra food e-commerce operation (Clube Extra).
During the first quarter of 2020, the total number of Mercado Extra stores with a structure adapted to operate the Express delivery mode increased fivefold, from 10 to 50 stores, while online sales accounted for 4% of total sales.