Discount Retail Chains fight with the big supermarket chains offering customers quality products at low prices. Discounters' success has been seen in the growth that these companies had during 2019, which exceeded 30%, showing a great challenge since they have large debts and negative assets.
Discount Retail Chain D1, belonging to Koba Colombia, which was ranked 24 in the general ranking of the Superintendency of Companies and consolidated as the largest discounter in the country, achieved a turnover of US $ 1.3 billion, which meant a growth of 30.74 % vs. FY 2018 and a loss of US $ 10,000,000. Fernando González, President of Koba Colombia, highlighted that "this growth was based on a strong development of the company's perimeter, reaching 1,300 stores and with more than 390 openings during 2019". The debt-to-assets ratio is 105%, which is normal at discounters and means D1 owes more than they have and that their assets are backed almost all by third parties mainly goods suppliers.
This was followed by Jerónimo Martins Colombia 's discounter is ARA, with 616 stores, had operating income of US $ 0.8 billion, which represented a growth of 40.04% compared to FY2018 and a loss of US $ 120 mio. ARA has equity of US $ 17 million and although the debt percentage is at 98%.
REVE Group owner of Mercadería SAS, the Colombian company behind Discounter Justo & Bueno, is the third largest discounter in the country. In 2019, it managed to increase its income by 56.81%, reaching US $ 0.7 billion, a loss of US $ 70 mio, with the percentage of debt over assets of 140%.
A good year for the retail sector According to the December version of the Monthly Manufacturing Survey, a study presented by Dane, real sales had a significant rebound last year, growing 7.1%. In a year in which there was a steady increase in unemployment, it is noteworthy that retail trade ended 2019 with 2.9% more employees.