Mexico: Tiendas 3B will open 150 stores and expands with E-commerce

Discount Retail Chain Tiendas 3B (owned by Anthony Hatoum and PE Group Quilvest Capital Partners) plans to close the year with 1,350 stores, while expanding its coverage thanks to e-commerce, through Mercado Libre.

At the moment, Tiendas 3B has 1,200 stores in 12 states across Mexico.

Supermarkets grew during the coronavirus pandemic and Tiendas 3B was no exception. In 2020 this chain of discount retail stores increased its number of customers, increased its sales to double digits and will maintain its expansion rate during this year.

Anthony Hatoum, founder and CEO of the chain, affirms that the company's revenues increased more than 25% at the end of 2020, as a result of its business model, which is committed to keeping prices low. This scheme, he points out, has allowed him to register similar growth during the last seven years.

"In this year, which is going to be possibly difficult, any customer who is looking for value and who wants his money to go further is a potential new customer for 3B Stores," he says.

Tiendas 3B opened its first store in the country's capital in 2005, after Hatoum moved to Mexico from Turkey. Now, its stores, which do not exceed 300 square meters, are located in the colonies of 12 states of the Mexican Republic, including Guanajuato, Querétaro, Jalisco, the State of Mexico and Guerrero.

This year, the chain is preparing the opening of 150 more stores to add 1,350 at the end of the year, in addition to its nine distribution centers. Without disclosing the investment amount, Hatoum explains that the location of these stores will follow the organic and “circular” growth that has caused the company to expand through the central region of the country from Mexico City.

The chain's founder considers that proximity was one of the keys that led to attracting new customers to his sales floor during the lockdown. In other words, it was easier for consumers to buy basic products in their mini-discounter, without leaving their neighborhoods to visit other larger-format stores. “You can walk to a 3B Store and you can go every day,” he says.

"The three b"

"Good, nice and cheap" are the 'three bs' that Mexicans look for when buying a product. The director of 3B Stores considers that the value offer of its business model is based on offering good quality products at low prices.

To achieve this, the company maintains a restricted range of products so that consumers can only find items from the leading brands in their best-selling format on their shelves and, together with them, own private label merchandise from 70 business partners at a still price. lower.

The investments of the discount retail chain in Mexico, which increased its sales by 8.6% during 2020, will have a growth of 32.7%.

The discounter does not offer product promotions to buyers and accepts only cash payments, to save the commission of banks or other digital payment platforms. “This is our policy. Always give the client the best that we can. It's part of gaining customer trust,” he says.

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Proximity stores are a format that large retail chains such as Walmart, Soriana and Chedraui have also explored in Mexico, with their Bodega Express, Soriana Express and Supercito formats, respectively, and that allow them to get closer to buyers looking for the lowest prices . This is a scheme that, in fact, they have pushed for the last year.

Walmart closed last year with 1,133 Bodegas Express, the format that has driven its growth the most, as happened in the last quarter of 2020, when it opened 20 stores of this format out of a total of 35 new stores.

“Mexico is a very competitive market in for the retail sector, much more than any other country I know. But it is such a large country, with such a large, dynamic market that there is room for two, three or four players in this area of ​​local stores. There is room for everyone and this benefits the customer at the end of the day,” says Hatoum.

The surprise of e-commerce

Online sales are a segment that Tiendas 3B boosted with Mercado Libre's cooperation. The online store within the company's marketplace achieved strong growth because it had a very small base, but what has surprised the Lebanese businessman the most is that they have orders from cities where they do not have coverage, such as Tijuana.

Even with good results on the digital platform, Hatoum explains that for now he will not launch his own online store. The businessman points out that the costs of the logistics chain would be a barrier to his low price policy.

“I prefer to sell in stores at the lowest price. I think that the market for the moment is here, it is what the client asks for. But the day he asks to buy more online, we turn to that channel in two seconds," he warns.

See here for more: https://expansion-mx.cdn.ampproject.org/c/s/expansion.mx/empresas/2021/02/22/tiendas-3b-abrira-150-tiendas-mientras-mira-al-e-commerce-de-reojo?_amp=true