Although Oxoxo is the jewel in the crown of Femsa’s Retail division, in the company’s new projects there are two little-known brands that it wants to start developing in Mexico: on the one hand, Bara, which is a discount format similar to the 3B chain or Neto, and on the other hand, Pronto, which will be small convenience stores with the full support of the company.
Fomento Económico Mexicano (Femsa) Director of Investor Relations Juan Fonseca Serratos says Forbes Mexico in an interview that as part of their new business strategy, these two brands will begin to gain relevance.
According to the manager, Bara is a discount format, a model which in many parts of the world has become very important, which is a little bigger than an Oxxo because it has a sales area of between 150 and 200 square meters, while its convenience chain has around 100.
“These are formats without a lot of luxury, it’s for a certain socio-economic segment where people want quality, but they don’t necessarily want luxury, the brand is the least of things, that’s why the own-brand concept is becoming very important,” he added. affirms.
In this sense, he points out that in Europe, with proximity, it is the formats that are progressing the most, with hypermarkets losing their appeal because people favor proximity.
Currently, chains such as Tiendas Neto compete in this sector in the country, with approximately 1,500 branches in 21 states of the Mexican Republic, in addition to 10,000 employees; as well as the 3B company, which until 2020 had more than 1,200 units.
“We had gotten our hands on Bara for many years, we opened the first stores in León, Guanajuato, 20 years ago, we took it and put, basically, it’s in the Bajío,” points out Fonseca Serratos.
And it is that this format was born in 1998 in the city of León and is currently present in Jalisco, Guanajuato, Aguascalientes, Querétaro, as well as San Luis Potosí, but Femsa wants to expand it to more cities.
“It took us a long time to find the ideal value proposition and it seems we have already done it, selling by store, we know 270 Bara stores today and sales are already sufficient to absorb thethe management team, in order to grow faster. In our five-year plans, Bara is already a format that needs to grow, start moving the needle, they’re going to see us open more“, he underlined.
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Femsa also wants to be the corner store
However, this is not the only format that the company led by José Antonio Fernández Carbajal wants to promote, it is also will seek to be the small convenience store for Mexicans with the Pronto brandwhich will operate like one of those traditional businesses, but with the benefit of having the Oxxo supply chain and its efficiencies.
The company’s Director of Investor Relations explains to Forbes Mexico that this model further connects the traditional chain, which will work in two ways; on the one hand Femsa’s own and on the other those of the allies, that is to say that it will make partners of the store owners.
“Coming soon what is a small corner store, operating with Oxxo standards and supply chainIt’s like a supermarket. We are in the first throw of the first inning, it is a very future subject, but we already feel comfortable”, he comments.
Despite this, Juan Fonseca says this format has its complications and a process that requires a lot of learning to really understand the pain point of these companies, how they can improve it and perform better.
However, the business opportunity is enormous, since the neighborhood stores are the most important channel in Mexico, with which all the supermarkets combined and all the Oxxos are short, since these “changarros” sell more than 50% of all the daily products of Mexicans. .
Therefore, with the “ally” format they hope to add thousands of small stores so that they become their partners or them, the truck that will supply them will be the same one that supplies Oxxo.
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