Brazil retailer Grupo Pão de Açúcar to open 100 supermarkets in 2013

18 April 2013 (Last Updated April 18th, 2013 18:30)

Brazilian retail major Grupo Pão de Açúcar is outlining plans to invest BRL2.02bn ($1bn) to launch 100 Minimercado Extra supermarkets in 2013.

Brazilian retail major Grupo Pão de Açúcar is outlining plans to invest BRL2.02bn ($1bn) to launch 100 Minimercado Extra supermarkets in 2013.

Compared to BRL1.58bn ($792m) investment in 2012, this year investment is up by 21.7%.

Most of the new stores are planned in smaller cities to drive growth in less competitive markets.

The retailer is looking to step up its investment by 80% over the next three years, reported Reuters.

Grupo Pão de Açúcar is also looking to leverage feeble market conditions to boost its performance, expanding its retail footprint in the country.

Currently, the retailer operates 1,882 stores that include 163 Pão de Açúcar 207 Extra supermarkets, 138 Extra hypermarkets 107 Extra minimarkets and 61 Assaí stores.

The company has also secured regulatory approval to acquire Casas Bahia and Ponto Frio appliance chains.

However, Brazilian antitrust watchdog Cade has granted approval with specific restrictions mandating Grupo Pão de Açúcar to offload nearly 8% of its retail network.

The move from Cade is expected to slash unfair competition amidst country’s growing consumer class.

Agreeing to the conditions, the retailer has planned to sell 74 stores across 54 cities generating about 3% of gross revenue for its subsidiary Viavarejo home appliance unit, formed by the acquisitions.

Grupo Pão de Açúcar, nevertheless, added that it would gain all the cost savings of the merger.

The retailer entered into an agreement to acquire Ponto Frio in June 2009 and Casas Bahia in December 2009 to form a retail giant with combined value of BRL4bn ($2bn).