top of page

Mexico: The significant growth of discount stores after Covid

Updated: Sep 29, 2023

Discount Retail Chains Tiendas 3B, Neto, Waldo's, Mi Super Bara and Willys went from 2,180 stores in 2019 to about 3,300 stores this year. Discounter Tiendas 3B opened in less than two decades about 1,800 stores in Mexico. The hard discount retail channel in which businesses such as Tiendas 3B, Neto, Waldo's, Mi Súper Bara, Super Alan, and Willys participate, became one of the retail formats that had the greatest expansion after the coronavirus health emergency in Mexico, with an increase of 51 percent in the number of stores in the country, which means that almost daily opened a point of sale to add 1,117 stores opened in the last four and a half years.

Between 2019 and so far this year, hard discount points of sale went from 2,180 to 3,297 stores, according to an analysis by the consulting firm Retail Lab. "The hard discount has a psychological effect of being a supermarket without being so expensive," explained Jorge Quiroga, general director and founder of the consultancy firm.

In the last four and a half years, price clubs and wholesalers that make up chains such as Sam's, Costco, Puma Abarrotero, Zorro, City Club and Scorpion, lost 113 stores, a drop of 32%. The closure of stores was followed by specialized chains such as Radio Shack, Party City, Todo Moda and highlights until the withdrawal of the Mexican market of Best Buy, which closed 372 stores in the country. While the supermarket managed to increase its number of stores by 8.2 percent; convenience rose 46 percent; Departmental 48 percent, while the expansion of the hard discount was 51.2 percent.

Walmart de Mexico (Walmex) increases its revenues 9.3 percent in the second quarter. In sales, these types of high-discount chains tripled their share in Mexico in recent years, and already contribute 2.3 percent of revenue.

"The consumer is more willing to change stores, the channel that consumers are visiting the most is hard discount that increased 10 points, with a total of 45 out of every 100 Mexicans are visiting them, and 10 are new," said Laura Heredia, Retail Vertical Customer Success Leader for NielsenIQ in Mexico. He added that these businesses prioritize their own brands that contribute 40 percent of their sales, while their average ticket is 59.70 pesos.

"In groceries you will never find imported cookies, and in hard discount not only has cookies, it has many other imported products, so in its strategy is to be willing to pay a little more for the sales floor than grocers, and that is why they have gained so much ground, "said Quiroga.

In this regard, the consultancy Kimetrics acknowledged that in recent years this type of chains have been very successful because they offer low prices and a variety of more select products.

"In addition, they can offer special promotions and discounts on large purchases to entice customers to buy more products at once," he said in a report.

The firm listed that this type of business is characterized by more accessible prices for the Mexican market, offering own brand products, in addition to a large number of points of sale, but with smaller formats than a super and strategic locations.

An example of this success is Tiendas 3B that in less than two decades has opened about one thousand 800 stores in Mexico of formats between 400 and 500 square meters.

"They were placed as a novel model in Mexico since 2018, it is not convenience, but it is not super, you can make a fairly complete purchase, except for perishables, they bet that people who go have access to a market on wheels or municipal, "said Carlos Hermosillo, independent analyst specialized in the consumer sector.

(Special)3B's yolk seeks to reach high income customers The discounts and hard discount offers also point to the socioeconomic income category of B + and A, especially led by Tiendas 3B that integrated the market to its YEMA format. "Tiendas 3B has just opened Miguel Ángel de Quevedo a new proposal, he put YEMA, it is a store with pure private label items, but of better quality, and it is a European type store like Aldi," said Quiroga.

The new chain has two branches, one in Coyoacán and the other in Escandón, where unlike Tiendas 3B, they offer gluten-free products, bulk seeds not usually found in other supermarkets, proteins, and personal care products, to name a few.

On its online site the chain reports that its products can also be found in some Tiendas 3B stores and highlights that they decide the content of their shelves depending on the location, so in areas such as Narvarte, Polanco and Verónica Anzures the offer changes.


bottom of page