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Food Retail Map. in Latin America. Objectives and Study Methodology. Objetives. Generate a portrait of Latin America’s Food Retail situation, with an emphasis on the modern channel and fast moving consumer goods.

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Food Retail Map

in Latin America

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Objectives and Study Methodology

Objetives

  • Generate a portrait of Latin America’s Food Retail situation, with an emphasis on the modern channel and fast moving consumer goods.
  • Portray the specific characteristics of each market by country in addition to the most relevant events.
  • Present the Top 10 ranking of the most important retailers, offering key figures and store network.

Methodology

  • Gather information of the sector through the crossing of different sources: Government agencies, retail associations, consulting firms and retailers informations.
  • Synthesize this data taking into account the different specifications in each market.
  • Collect main information of retailers through information gathered by our Annual Census, which is directed to this sector, in addition to estimations where data is no available of sales and selling surface.

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Latin America Food Retail 2010

  • During 2010 Latin America’s food retail business was crossed by several simultaneous phenomenon that include: the expansion of small surfaces, the growth of the wholesale business and the internationalization of retailers to less developed markets such as Peru, market that offers attractive growth potential.
  • The expansion of the Wholesale business in Latin America

The expansion of the wholesale business in Latin America during 2010 responds to several factors in which we can include the shift in consumer habits, inflation and the expansion of small surfaces that shop in these formats in order to obtain their stock.

During 2010 the number of Cash & Carry stores in the region grew by 127 stores, some of which were launched in new markets, such as Carrefour’s Atacadao, that announced the launch of its first store under this banner in Argentina in 2010 and that finally opened in April 2011. The largest portion of this growth, however, comes as a result of a redefinition of banners in Chile, undertaken by SMU Group, that shifted 59 stores to the Mayorista 10 banner.

Carrefour also launched its Atacadao format in Colombia during last year, with the launch of two cash & carry outlets by the end of 2010, and the promise of an additional four stores during 2011.

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Makro Argentina also invested during 2010, with the acquisition of 100% of the cleaning product company Basualdo, with operations in several provinces in the country, and the acquisition of Cordoba’s firm, Tarquino.

  • The latest event in this direction happened in early 2011, following the announcements that took place during 2010, with the confirmation by Chilean SMU Group, property of Saieh-Rendic Group, of the acquisition of 100% of wholesaler ALVI, which until that moment belonged in 35% to Walmart Chile and 65% to the Villablanca family.  
  • Small Surface Growth:

In the other end of the spectrum, during 2010 we also witnessed the growth of smaller commercial surfaces, mainly of the bodegas and mini markets formats.

In Mexico, for instance, the Bodega format added 215 new stores during last year, driven mainly by the North American retailer Walmart that, in addition, also bet strongly on the Bodega Express format, that launched 142 new stores in the country.  

Also in Mexico, Soriana began operating the Soriana Express banner that, with the objective to compete with Walmart’s bodegas, opened 20 new stores.

Colombia was another market in which the tendency of opening small store formats became apparent, with the launch of Exito’s convenience store banner, Exito Express, a format of an average 200 square meters. During 2010 the company opened nine stores and announced the plans for expanding this format during 2011.

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Another retailer that began operating the Express format was Carrefour, with the launch of its first two stores under this banner in Bogotá, Colombia’s capital city.

  • In Argentina the French retailer launched Carrefour Market, and announced that it will convert all Express stores to this banner, while all Carrefour mini markets, launched in 2008, will be converted into the Express banner. Meanwhile, the retailer announced that it will continue to grow in this format with the launch of 20 new Express stores.
  • Internationalization of retailers to high potential markets:

Large retail groups have extended their regional reach during 2010 entering new markets or strengthening its presence in markets where they have been operating for a short period of time.

This was the case of Dutch retailer Makro, which extended its presence to the Peruvian market with the launch of two additional stores, adding a total of four stores in the country.

Also, making its debut entrance to Peru is the Chilean SMU Group that, following the acquisition of Chilean retailer Alvi, has become the owner of eleven stores that operated in the country under the Mayorsa banner.

The Chilean retailer Cencosud reaffirmed its presence in Brazil with the acquisition of three new stores wich include Super Familia, Perini and Bretas.  

The convenience store retailer Oxxo also extended its presence in Colombia, where the group launched twelve new stores. Strong rumors also suggest that the retailer could enter Peru and Chile in the next two years.

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Key Country Data

(1) Source: IMF- Annual Average

* The total GDP was taken in million US$ at current market value ** Numbers are expressed in dollars at current prices

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GDP Evolution by Country

Latin America: Estimated GDP 2008-2010 (Annual percentage variation)

Source: IMF

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Share Traditional Channel vs. Modern Channel (%)Distribution of sales of fast moving consumer goods

Source: Information provided by official government organisms (2008-2010) and retailer information

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Participation of International and Regional Chains Latin America

Mexico

Central America

Venezuela

Colombia

Brazil

Peru

Uruguay

Chile

Argentina

Regional Retailer

Source: ILACAD World Retail

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Concentration Top 3 Retailers

Central America

(Country average)

Mexico

Wal-MartSorianaComercial Mexicana

74,5%

87,7%

Venezuela

CativenMakroCentral Madeirense

29,1%

Colombia

ÉxitoCarrefourOlímpica

62,8%

Brasil

CBDCarrefourWal-Mart

55,2%

Peru

CencosudSPSAFalabella

91,9%

Chile

D&SCencosudGrupo SMU

Argentina

CarrefourCencosudCoto

84,0%

57,2%

Source: ILACAD World Retail

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Key Country Data in LatinAmerica

Mexico

USD M.46,824.0

+8.4% SqM2

Venezuela

USD M.10,921(official rate) USD M.5,076(parallel rate)

+0.4% SqM2

ColombiaUSD M.12,548+7.4% SqM2

Brazil

USD M. 90,038 + 23.3% SqM2

Peru

USD M. 2,674

+12.5% SqM2

Chile

USD M. 12,500

+ 21.0% SqM2

Argentina

USD M. 16,244+ 4.7% Sq:2

Total sales modern channel (in million US$) Square Meter Evolution (2009/2010)

Source:ILACAD World Retail

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Top 3 Concentration by Country

Honduras

WalmartLa ColoniaJunior

Guatemala

WalmartUnisuperPricesmart

77.7%

95.7%

Nicaragua

WalmartLa coloniaPricesmart

98.0%

Panamá

Súper 99Súper ReyEl Machetazo

71.1%

El Salvador

Grupo CallejaWalmartPricesmart

95.1%

Costa Rica

WalmartMegasuperPerimercados

88.6%

Source: ILACAD World Retail

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Key Country Data Central America

USD 782.6

+ 7.7%SqM26,528 (+4.2%)

Total sales of modern channel (in million) Square Meter Evolution Sales by square meter in USD (Annual variation of sales by SqM in local currency)

USD M1,335.3

+ 4.5%SqM24,580 (-1.3%)

USD 344.8

+ 11.8%SqM24,548 (+9.0%)

USD 1,269.5

4.8% SqM25,613 (+5.4%)

USD 847.3

- 6.3% SqM23,224 (8.6%)

USD 2,020.6

+ 2.0%SqM24,446 (-1.60%)

Source: ILACAD World Retail

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Sales of Modern Channel and Share by Country 2010

Sales of Modern Channel Share by Country

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Mergers and Acquisitions 2010

Source: ILACAD World Retail

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Mergers and Acquisitions 2010

Source: ILACAD World Retail

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Mergers and Acquisitions 2010

Mergers and Acquisitions 2011

Source: ILACAD World Retail

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MERGERS AND ACQUISITIONS 2010

  • Last 2010 was characterized, among other things, by the internationalization of retailers towards fast moving markets with big potential, in addition to mergers and acquisitions that aimed at strengthening positions and easing the entry to new markets.
  • One of the most notorious cases in this regard were Walmart’s operations in Central America which underwent a strategic expansion plan that helped develop and grow in the countries in Central America where the retailer operates.
  • The retailer that did the largest number of acquisitions during 2010 was the Chilean Cencosud, that purchased the Brazilian firms Bretas, Perini and Supemercados Familia, becoming the largest supermarket operator in the northereastern region of the country, strengthening its presence in a market where the three top retailers are giants of the likes of Grupo Pão de Açucar, Carrefour and Walmart.
  • An important event that took place in Latin American during 2010 was the expropiation of Cativen stores in Venezuela, which belonged to the French Casino Group, done by the Venezuelan Government of Hugo Chávez. During an early stage, Chavez had said that the Casino stores would become part of a gonvernments retailing chain, however, and after a long negotiation process, the parties agreed that Casino would remain with 20% of the company’s shares that, from that moment on, were to be known as Red de Abastos Bicentenario.
  • After years of intense movements in terms of mergers and acquisitions by Chilean retailer SMU Group, during 2010 these activities slowed their pace. The young retailer did however acquire wholesaler Alvi, wich enable its entrance to Peru, through the Mayorsa banner in the country, in addition to strengthening its position in the Chilean retailer industry.

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MERGERS AND ACQUISITIONS 2010

  • In line with the tendency of joining forces, Exito Group underwent a process of commercial alliance with the Caja de Compensación Familiar, CAFAM, in Colombia, which lead to Exito operate 31 Cafam stores, and the latter 91 pharmacies of Exito, Ley and Pomona. In addition to this alliance, in 2010 the merger between Almacenes Exito and Carulla Vivero was completed.
  • Another retailer that added stores during 2010 in Colombia was Olimpica, that acquired three Merkepaisa stores and the whole of the Megasuper store network.
  • In Argentina, one of the most relevant events was the exit of hard discount stores, Leader Price, of French Casino Group, who sold its operations to the national retailer Super Eki which, in turn, converted them into the Super Eki Plus banner.
  • In addition, Carrefour Argentina acquired nine Best stores of the national retailer La Anónima. Jumbo Retail named a new partner, UBS Bank, that now operates 38.6% of the Cencosud branch. In response to the reactivation of the wholesale segment in the country, Makro bought Cordoba’s company Tarquino, strengthening its leading position in the Argentine market.
  • Lastly, one the most important acquisitions in the region took place in the pharmaceutical segment, with the purchase of Farmacias Ahumada S.A (FASA) by Casa Saba in Mexico which also acquired its operations in Mexico, Peru and Chile.

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Top 10 Latin America’s Food Retailers Food distribution formats, consolidated sales in the region

Source: ILACAD World Retail

  • Revenues of each group include 100% of sales of each branch in wichithe retailer has participation. ** Excludes its Venezuela’s branch following the 2010 expropiation *** Includes the recently acquired Bretas of Brazil **** Cash & Carry Format **** * Convenience Store Formats

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In 2010 Walmart was once again the leader in Latin America’s food retail segment, finding itself like previous years at the top of the chart. The retailer grew at similar levels than in 2009, reaching during 2010 annual gross sales of 15.7%. The consolidation of these positive results in the region, which according to the retailer “is one of the main growth drivers of the company”, is in part consequence to the performance in markets such as Brazil and Mexico, in addition to the consolidation of its operations in Central America as a result of the culmination of the acquisition process.

The French retailer Carrefour was knocked out of the second place place by Casino that, despite of having suffered a backlash in its operation is Venezuela, was able to secure the second place in the Top 10 Ranking of the region, leaving Carrefour at number 3.

The most important movements in the chart with regards to the retailers total sales during the year were Walmarts 15.7% rise, Group Casino with 37%, Carrefour with 15.1%, Cencosud (21.4%), Soriana (11.4%), Comercial Mexicana (7.3%), Oxxo (22.5%), Grupo Chedraui (13.2%) and Grupo SMU with 33,1%. The Dutch retailer Makro suffered a decrease of 3% during the period, due in part to the strong invesments the retailer underwent during 2010.

Makro also managed to grow two positions in the ranking, placing itself in 2010 at number six, driven by its Brazilian sales.

Top 10 Retailers in Latin America

Source: ILACAD World Retail

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top 10 ranking evolution in america latina net sales expressed in millions of dollars
Top 10 Ranking Evolution in America Latina (Net sales expressed in millions of dollars)

Source: ILACAD World Retail

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Autoservice Store Format Evolution in Latin America

  • During 2010 a total of 2,803 food stores openened in Latin America, which represented an increase of 151.1% in comparison to the 1,116 stores the retailer opened in 2009. This reaffirms the region as one of great potential.
  • As in 2009, the format that grew the most during the period was the Supermarket format, which includes Mini and Convenience, both formats that grew at good pace during the last year. These are followed by the Discount format which includes the Bodegas and whose growth was propelled by its performance in Mexico.

Source: ILACAD World Retail

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Walmart

1

  • Walmart is the leading retailers in Latin America taking into account the group’s sales in the region that, during 2010, reached 45,299 million dollars, representing a 15.7% increase in regional sales in comparison to the previous year, including the markets of Argentina, Brazil, Mexico, Puerto Rico, Chile and Central America.
  • Mexico represents 50.22% of the group’s revenues in Latin America, equivalent to a total of 22.753.5 million dollars in 2010. Brazil follows, representing 29.52% of the group’s sales in the region, these two becoming the two most important markets in the region.
  • In 2010, Walmart presented a firm tendency towards opening Bodegas and discount stores in Latin America, with Mexico being the most emblematic market, where the retailer opened 215 Bodega Aurrerá or Brazil, Chile and Central America where the company opened other 90 stores under these banners.

NOTE: The countries where the retailer operates in Central America include: Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Sales correspond to 100% of the revenues generated by each country branch.

Source: ILACAD World Retail – Annual Walmart Report 2010

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Wal-Mart Store Network operated in the region

Source: Annual report Walmart 2010

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2

Grupo Casino

  • Casino escalated one place in the Top 10 Retailer Ranking, coming at number 2, leaving Carrefour in the third place.
  • Brazil and Colombia were once again the countries that most contributed to the group’s revenues in the region, representing a 80.04% and 15.8% of the group’s sales respectively.
  • In Brazil, Grupo Pão de Açúcar stood out both in sales of food and non food categories, driven the latter by the operations of Ponto Frio and Casas Bahia.
  • In Argentina, Casino Group sold its 26 Leader Price stores to the national Super Eki chain, keeping only the operation of the Libertad hypermarkets.
  • In Venezuela Casino suffered the most radical change, with the expropiation of Exito and Cada stores, that in total came to 41 stores, making the group remain with only 20% of company shares following a period of negotiations with the government of Hugo Chavez.
  • In Colombia, Grupo Exito launched a new convenience format, Exito Express, which is intended to expand strongly in 2011 in addition to the formats of Exito Super, Exito Vecino and Carulla Express. All these stores go in line with a regional trend of opening smaller surfaces. Also, during 2010 Casino reached a commercial alliance with CAFAM by which Droguerías Cafam began operating 91 pharmacies of Exito, Ley and Pomona, and Exito began operating 31 Cafam stores.

Share of Casino in local branches

Source: Annual report Casino 2010

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Store Network in the Region

Source: Annual report Casino 2010

* In 2010 the retailer was expropiated by the Venezuelan government retaining only 18.9% of total shares.

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Carrefour

3

  • During 2010 Carrefour Group moved down one spot from number 2 to number 3 in the ranking of Latin America’s top 10 Retailers. During this period the retailer reached sales for 23,825 million dollars.
  • Carrefour managed to increase its sales by 15.1% in 2010 in Latin America, becoming one of the most dynamic markets in the group’s international operations.
  • Out of all the countries in the region, Brazil represents the most important for Carrefour, with 69.14% of the group’s revenues in the region belonging to this market. During 2010, sales in this country grew 11%, and registered 124 store openings, with 46.7% belonging to the Discount emblem, Dia%.
  • The retailer took the Brazilian Atacadao format to Colombia, where it opened three stores and plans to continue growing in 2011. In addition, the retailer launched the Express format in the country, as another alternative to win space facing the traditional channel.
  • Carrefour also introduced new formats in Argentina, taking the Carrefour Market banner and launching the first Atacadao at the beginning of 2011.

Source: Annual Report Carrefour Group 2010

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4

Cencosud

  • Total sales for the supermarket division of the group rose to USD$ 9,198 million, signifying an important 21.4% rise in comparison to the previous year.
  • In Cencosud’s supermarket division, Chile represents 35.9% of total sales, while Argentina finds itself at second place with 29%. Concentrating both markets they represent 65% of the total sales for the group.
  • In 2010 the retailer focused on the search of a different strategy in Chile, focusing on its low prices and quality service, in addition to expanding and centralizing in urban arear of lesser income.
  • In Brazil Cencosud responded to the on going market trend of acquiring smaller stores, hence the acquisition of Bretas, Perini and Super Familia, becoming the largest operator in the northeast of the country.

Source: Annual Report Cencosud 2010

  • In Peru, Cencosud continued being the main retailer with its Wong and Metro stores, in addition to being awarded the price for leading the e-commerce strategy in the country with Wong, as well as launching itw own credit card to be used in all super and hypermarkets in the country.
  • For 2011, Cencosud announced that the main focus will be set in the launch of new stores, adding thus 36 stores in Chile, 25 in Brazil, 21 in Argentina and 20 in Peru.

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Store Network in the Region

Source: Annual Cencosud report 2010

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Organización Soriana

5

  • Organización Soriana, is a Mexican company that once again reached number five in the regions retail ranking and, among the regional chains, was once again in second place after Cencosud.
  • Sales for the group by the end of 2010 reached a total of USD$ 7,593.2 million, an 11.45% increase compared to the previous year.
  • During 2010 the retailer launched a new format, Soriana Express, opening 20 new stores, representing 53% of the total openings in the country, competing directly with the Bodega Aurrerá format of Walmart. This format was the most succesful of the group.
  • For 2011, Soriana will continue betting on Soriana Express stores since, with a forecast of 50 openings with an investment of 242 million dollars, 30 will belong to the new mexican emblem.

Source: Annual report Soriana 2010

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6

Makro

  • During 2010 Makro, one of the most important wholesalers with presence in Latin America and Asia, incorporated a new country to the list of markets where it operates, adding Peru to the list that was already made up of Argentina, Brazil, Colombia and Venezuela.
  • As for the groups plans of expanding in the Peruvian market, the retailer announced that during 2010 launched 4 new stores in the country and began the construction of its first store in the interior of the country , in Arequipa.
  • By the end of 2010 sales of the group in the region rose to USD$ 5,087 million, with a total of 162 stores.
  • In Argentina, the retailer announced that it plans to invest in the launch of new stores Basualdo, destined to sell hygiene and cleaning products, which acquisition process finished in 2009 and of which it intends to operate close to 20 stores by 2015. In March 2010, the retailer also received the approval of Argentinean law for the acquisition of Tarquino company, in Cordoba.
  • In 2010 the group also announced its plans to expand in Colombia, with the opening of 12 stores to 2015.

Source: ILACAD – Annual report Grupo SHV 2010

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7

Oxxo

  • Oxxo stores continue to be leaders in the convenience segment.
  • In 2010 total sales of Oxxo rose 16.2%, to Mx$62,259 million (USD$5,045 million), finding themselves ahead of Comercial Mexicana.
  • Oxxocontinued growing during 2010 at a similar rhythm than in 2009 launching a total of 1.092 new stores in the two markets where it operates.
  • In Colombia, where the retailer began operating in 2009, Oxxo launched 12 new stores, elevating the total number in the country ton 17, while in Mexico the group opened a total of 1.080 stores, surpassing their initial objetive of 850 new stores.
  • For 2011 the group announced it intends to invest over 900 million dollars in the launch of new stores in both operating markets where it intends to launch over 1.100 new stores.
  • Likewise the retailer reiterated their intention to enter in new markets in the region, as is the case of Brazil.

Source: Annual group report FEMSA 2010 - ILACAD

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8

Comercial Mexicana

  • Comercial Mexicana autoservice sales rose to Mx$54,869 million (USD$4,446.4 million). This numbers are lagging behind the top positions in the chart, seeing as sales of Comercial Mexicana represent only 19.5% of the first retailer in the ranking.
  • The retailer offers a multiformat strategy that has from hypermarkets to price clubs.
  • By the end of 2009 the retailer launched a new banner called Fresko, a store directed to clients of a segment of high income, with a less gourmet approach than the City Market banner but larger and moret attractive than the Sumesa banner, traditional supermarket format.

Source: Annual report Comercial Mexicana 2010

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9

Chedraui

  • Grupo Chedraui kept a firm presence in the ninth position of the ranking of Latin American retailers, same as in the previous year.
  • The group has a wide extension in Mexico, mainly in the center and south of the country, and has, in addition stores in the United States in the states of California, Arizona and Nevada.
  • By the end of 2010 the groups revenues of autoservice rose to Mx$43,022 million (USD$3,486 million) which meant an increase of 13% compared to the previous year.
  • During 2010 Chedraui launched 13 stores and acquired three, reaching a total of 156 in the whole of country. Hypermarkets launched several stores increasing its number from 109 in 2009 to 120 in 2010.
  • Early in 2010 the retailer entered de Mexican Stock Exchange thanks to their IPO.
  • To 2014 the retailer aims to open an additional 160 stores, mainly in the smaller format stores of Super Chedraui.

Source: ILACAD – Annual report Chedraui 4T 2010

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10

Grupo SMU

  • During 2010 Grupo SMU consolidated its presence in Chile and continued betting on new formats in the country, this time with the launch of the new Food Market stores, a new supermarket concept tha enhances the shoppers experience in a modern and comfortable ambience.
  • The new format aims to have seven such stores in the country during the next two years.
  • During 2010 the group also began negotiations to enter into the Peruvian market, fact that they finalized early in 2011 through the acquisition of 100% of ALVI, the Chilean retailer with presence in the neighbouring country through Mayorsa.
  • The group also confirmed that, during 2011, it is set to open five supermarkets in Peru which will extend its current reach in this segment.
  • The retailer also began unifying its banners in 2008, and finished it last year having now all its stores under the Unimarc, Mayorista 10, and OK Market banners.

Fuente: ILACAD World Retail

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Argentina

Retail Market Facts – Modern Channel

40,519,000

8,662.9

10.7%

Population

GDP per capita

Inflation

Sources: ILACAD World Retail - INDEC

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Argentina : Denomination of Retail Formats

Modern

Wholesale/Cash & Carry:

Stores of over 9,000 square meters that sell products by bulk. They are used by smaller stores to supply their stock.

Kioscs:

Small independent stores that sell cigarettes, candy and drinks for the most part. This format expanded strongly during the 90’s.

Hypermarkets:

Stores of between 4,500 and 15,000 square meters with an assortment of between 30,000 and 50,000 references.

Supermarkets:

Divided in Supermarkets (of between 850 and 1,200 square meters) and mini hypermarkets of

Between 1,200 and 4,500 square meters. They offer the same products as a hypermarket but in a smaller surface.

Specialized Formats

Traditional

Pharmacies:

Traditional or autoservice, they sell medicine and hygiene products, and can in some cases incorporate some food categories.

Autoservice:

Mini Supermarkets where Asian stores concentrate a large portion of the market. They are considered proximity stores.

Minimarkets:

Stores similar to neighborhood autoservice stores with an average selling space of 250 and 500 square meters.

Gas Stations:

Convenience format under developed in Argentina.

Almacén:

Traditional neighborhood stores with assisted shopping done through a counter.

Source: ILACAD World Retail

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Argentineretail in 2010 Small Surfaces: The new trend in Argentina’sfoodretail sector

  • Big hypermarkets have been left in a second place in the food retail sector in Argentina given the fact that, during 2010, the great bet was set in the opening of smaller formats aimed at satisfying daily shopping needs, closer to home or the office, in order to compete with the traditional channel giving the client a more efficient use of their time.
  • In this new era of openings, launches are concentrated in small stores such as Carrefour Express or Carrefour Market, or the Super Vea stores of Chilean group Cencosud, the Minimarkets of national store Coto and even the new Chinxpress of Asian autoservice segment, of close to 300 square meters of selling surface, that aims to establish close to 350 stores in 2011.
  • During 2010 there were also several proyects that aimed at slowing the expansion of large retailers in the country with the objective of ensuring the survival of the small and medium retailer, in addition to stopping the expansion of Asian autoservice stores.
  • Carrefour, once more the leading retailer in the country, not only acquired nine Best stores, property of La Anonima, but also launched the new Carrefour Market beginning a conversion plan that is set to finish in 2011 and that aims at coming closer to the image of its French headquarters. Unifying both their banners, colors and image, in addition to changing all Express stores to Market, and all mini markets to Express.

Source: ILACAD World Retail

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During 2010 there was activity in the wholesale sector, with the acquisition of Tarquino by Makro (that during 2010 announced the opening of 20 Basualdo stores to 2015). In addition to the launch of new stores by Yaguar, Makro, Diarco and Vital, and the arrival of the first Atacadado, property of Carrefour, to Argentina in 2011.

  • Walmart launched 14 new Changomás stores in several points of the country, faced with the opening of only 3
  • hypermarkets in the same period. In addition, the retailer began operating in the e-commerce division, allowing them to compete with retailers such as Coto Digital, Disco Virtual, Jumbo a Casa or LeShop.
  • There were also clear advances in Asian autoservice stores, through different initiatives that, in order to compete with large retail chains, have included: a)the launch of the new Chinxpress format that will begin operating in 2011; b) the creation of 150 private labels; c) the launch of a new and own credit card.
  • During 2010 there were also changes in consumer habits among argentineans that, driven by inflation of close to 25%, now have begun planning their shopping in advance, using special offers by retailers, banks etc. Another tendency experienced by shoppers includes the use of e-commerce given the lack of time and the search for comfort. This is why sales of e-commerce hace grown by 50% in 2010.

Source: ILACAD World Retail

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Retailer Ranking Argentina

  • Sales include food retail and excludes home improvement
  • ** Includes Mini Hypermarkets (83 stores) of an average surface of 4,500 Square meters.

Source: Information of retailers, INDEC –ILACAD World Retail

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Bolivia

Retail Market Facts – Modern Channel

10,426,000

1,839.70

7.18%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

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Foodretail in Bolivia 2010

A marketwithlittlechange in 2010

  • Once more the retail chain of Hyper and Supermarkets Hipermaxi held the number one spot in the country’s retail ranking, followed by Fidalga company which only operates supermarkets in the country.
  • During 2010 Hipermaxi launched the new Mega Hipermaxi Norte, with an investment of 1.2 million dollars and a selling surface of 10.000 square meters. Fidalga also launched a new shopping mall, Shopping Norte, with an investment of 1.5 million dollars in addition to opening a store of three stories in the country. Meanwhile, IC Norte opened a new mega store in February 2011 with an investment of 11 million dollars and a selling space of 19.000 square meters.

Bolivia : Denomination of Retail Formats

Ranking Retailers Bolivia

Modern

Hypermarkets:

Stores of between 2,500 and 3,000 square meters. These are smaller compared to the same format elsewhere in Latin America.

Supermarkets :

Selling surface of between 800 and 1,000 square meters. Wide assortment of food products and basic categories.

Source:Retailer Data

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Brazil

Retail Market Facts – Modern Channel

193,253,000

10,816

5.91%

*NOTE: It is considered Modern Channel the autoservice stores of more than 2 check outs. Having into account the 500 retailers that make the ABRAS.

Cash & Carry: Includes the wholesale formats and incluye los formatos mayoristas y de atacarejo

Source: ILACAD World Retail - ABRAS

Population

GDP per capita

Inflation

47

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Brasil: Denomination of Retail Formats

Modern

Traditional

Hypermarket:

Stores of over 5,000 square meters and 50 check outs and 45,000 references. Offers a wide assortment of food and non-food items. We can also find electronic products and small household appliances.

Supermarket:

Stores of between 750 and 5,000 square meters, that offer between 7,000 and 20,000 references. Depending in the size of the store they can a wide range of non food products.

Neighborhood Store

Small businesesses based in proximity of an average of 100 square meters. Limited offer.

Specialized Stores:

Butchers, Bakers, etc.

Price Clubs:

Format that sells in large volumes through a membership strategy. Low operational cost.

Hard Discount:

Stores of between 200 and 400 square meters. Basic assortment at low prices. Wide selection of private labels.

It is considered modern channel autoservice stores of more than 1 check outs and having into account the 500 retailers that make up the whole of the ABRAS, with a total of 7,565 stores.

The total number of stores taken into consideration by ABRAS includes traditional autoservice, with 73,563 stores, which leaves a rest of 81,128 stores.

Convenience Stores:

Selling surface of an average 250 square meters. These stores offer an average of 1,000 references, mainly of the food categories. They place great emphasis on service.

Atacarejo:

Stores where retail meets wholesale and welcomes both big clients as well as supplies for households.

Fuentes: ILACAD World Retail - ABRAS

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Brazilian Retail in 2010 Historic Growth of the retail sector in Brazil in 2010

  • Retail sales in Brazil grew in volume by 10.9% during 2010, becoming the largest growth experienced in a decade, according to the Brazilian Institute of Geography and Statistics (IBGE for its Spanish acronym). Meanwhile, in value, sales rose by 23,2% during the last year, reflecting a positive economic context taking place in Brazil, characterized by an increase in spending money and access to credit.
  • The Brazilian retail market is still dominated by the informal channel, which comprises almost 60% of the sector. Within the 40% of the modern channel, the main retailer during 2010, and second year round, was Grupo Pao de Acúcar, with 22.1% of market share followed closely by Group Carrefour and Walmart Brazil.
  • While Pao de Acúcar stood out for its strong growth, not only in the food categories but also in the non-food categories thanks to the help of its Ponto Frio and Casas Bahía stores. Cencosud was another stores that gained in the spotlight with the acquisition of three retailers during 2010, including: Super Familia, Perini Comercial de Alimentos and Supermercados Bretas.

Source: ILACAD World Retail

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Brazilian middle class has grown consistently during the past couple of years, as has been the trend in the rest of Latin America. During 2010 we witnessed the search of clients of a convenience option, reason why chains in Brazil announced they would bet on smaller format stores working with a low prices.

  • On the other hand, segments A and B of the population of an age range of between 25 and 45 years have shifted towards e-commerce, a business model in which Carrefour has made its debut early in 2010.

Source: ILACAD World Retail

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Ranking Retailers Brazil

*Belongs to 100% of the revenues of the Group in Brazil

Source: ABRAS – Retailer information

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Chile

Retail Market Facts – Modern Channel

17,190,000

11,581.09

3%

Source: ILACAD World Retail - ASACH

Population

GDP per capita

Inflation

52

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Chile: Denomination of Retail Formats

Modern

Traditional

Specialized Formats

Hypermarkets: Stores of between 6,000 and 12,000 square meters with an assortment of 25,000 to 30,000 references. Wide assortment of food and non food products in far away areas.

Neighborhood Store and Botellería:

Dedicated to small businesses with a narrow range of products oriented to daily needs.

Pharmacies:

Very developed in the country by Farmacias Ahumada. Format dedicated to the sale of medicine, food products and toiletries.

SupermarketsStores of between 3.000 to 6.000 square meters that offer a range of between 1.500 to 10.000 references. Proximity.

Botellería:

Dedicated exclusively to the sale of wine.

Hard Discount:

Stores of between 250 and 1.200 square meters. Limited offer to basic categories. Most products are private labels and first prices.

Convenience stores:

Stores of less than 500 square meters. Limited offer of food and drinks. Oriented to serviceand opened during long periods of time.

Source: ILACAD World Retail

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Chileanretail in 2010ConvenienceStores: A promisingsegment in Chile

  • A new tendency in Chilean retail that is emerging in the industry is the convenience segment, being this an underdeveloped format in the country, that offers larger profit margins in comparison to the supermarket, reaching almost all levels and costing little money to open an set up.
  • Taking this new trend into consideration, SMU entered in this segment in 2010 with the purchase of retailers OK Market. Meanwhile, Ekono pesented its second largest growth rate after Walmart in 2010. One must not forget that both companies have to compete with who is the leader in this segment: Big John. Also, we must not rule out the apparent interest of chains like 7-Eleven and Oxxo in the promising Chilean market.
  • Another factor to take into account is the arrival of Internet, a strategic tool that is changing the way in which clients shop in the country. This is quickly gaining space over in store promotions, with the paper platform quickly loosing ground to the digital alternative. It is by this mean that many retailers have bet on a good communication through their websites and possibly increasing its sales through e-commerce.
  • Consumers have also become more demanding, they are unfaithful, they search for quality and price, and use mainly internet to find out about deals and promotions. Strength and demands are the two main characteristics of this new Chilean consumer. In response to this new habits, retail chains in Chile have accelerated their expansion, increased their range of services and products, strengthened their e-commerce platforms, increased their private labels, revamped their stores, launched new formats and projected millions of dollars in investments for the next years.

Source: ILACAD World Retail

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At the beginning of 2010 Chilean retail was shaken by the earthquake that hit the country, due to which many retail chains were forced to close stores, although these managed to recover quickly.

  • One of the expectations for 2010 was the performance of Walmart in the segment and, responding to these, the company increased its sales, opened 27 new stores, began their system integration, launched over 500 products of private labels, brought two international private labels, launched its e-commerce platform, in addition to fficially changing its name to Walmart Chile. Also, the company announced a strong expansion of the Lider Express emblem for the next five years in which the group aims to open between 30 and 40 stores.
  • SMU continued growing in 2010, concluding the conversion of Casa Rabié stores to the Unimarc banner; launched a new specialized supermarket format, Food Market; acquired OK Market and Mayorista Alvi, which allowed them to enter Peru wehre they also plan to open at least five Unimarc supermarkets in 2011. In addition they mentioned a strong estimaded expansion of Mayorista 10, with the final aim of becoming they main actor in this segment in the country.
  • As for the e-commerce, Falabella was awarded by the Latin American Institute of E-Commerce, for its digital platform, falabella.com, considering it the leader in Chile with 57% of online sales in the country. After the entry of Walmart to e-commerce, only Unimarc and Tottus are out of the online business.
  • On the other hand, Southern Cross announced an investment of 80 million dollars by mid 2011 in order to open 25 Bigger stores. For the next 3 years the retailer plans to inverst 200 million dollars in the opening of 81 stores.
  • In addition, Falabella, Cencosud, SMU, Walmart and Ripley plan at making long term investements in the long run in order to increase their operations in the country.

Source: ILACAD World Retail

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Retailer Ranking Chile

(e ) estimates based on square meters adn sales by square meters

*Sales include only autoservice formats.

Source: Asach – Retailer Data- ILACAD World Retail

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Colombia

Retail Market Facts – Modern Channel

45,512,000

6,220.6

3.17%

Source: ILACAD World Retail - DANE

Population

GDP per capita

Inflation

57

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Colombia: Denomination of Retail Formats

Modern

Traditional

Hypermarkets:

Stores of over 4,500 square meters with a range of 35.000 to 45.000 square meters. Wide range of products located in periferic areas.

Supermarkets:

Stores of between 600 and 4.500 square meters that offer a range of 1.500 and 10.000 references of the main categories.

Fresh Market Area:

They commercialize fruit, vegetables and grains in an open area. Located in densely populated areas. There is an estimate of 1.200 markets.

Supermarket-Cooperative (Supermercados de Cajas de Compensación):

Organizations that offer a service to members including that of grocery shopping.

Discount Stores:

They exist to a certain extent. There are three stores in popular neighborhoods of Medellín.

Neighborhood Store:

Traditional store of between 20 and 200 square meters, with a wide assortment of basic necessity located in middle-lower class areas.

Bodegas:

Based on price and proximity. They offer a complete fresh area with low prices.

Wholesale/Cash&Carry:

Stores of over 9.000 square meters that sell products by bulk. They are used to supply smaller format stores.

Superete:

Independent autoservice with an area of an average 100 square meters. There are 1.800 such stores in the country and they re better equipped than a neighborhood store.

Minimarkets:

Stores similar to neighborhood autoservice of between 200 and 600 square meters.

Source: ILACAD World Retail

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Colombianretail 2010A Diversity of FormatsaftertheTraditionalChannel

  • During 2010 the Colombian retail market was characterized by two clear situations: one, the increasing presence of smaller surfaces like convenience stores Exito Express and Oxxo, or proximity stores like Carrefour Express; in addition to the growth of cash & carry outlets, mainly by Carrefour through the Atacadao banner.
  • Even though all formats are very different, they are all developed with one aim in mind: compete neck to neck with the traditional channel that, in Colombia, still reaches a high 47%, in addition to reach those clients that are not yet visiting large retail centers.
  • During 2010 Grupo Éxito launched the convenience format store Exito Express and announced its plans to to expand this format strongly during 2011 and during the next couple of years in an effort to replace neighborhood stores.
  • Also, the retailer launched the Exito Super, Exito Vecino and Carulla Express, all stores that support this trend towards smaller formats. The shift also demanded a change in company image in these stores.
  • In 2010 Exito closed a commercial alliance with Caja de Compensación Familiar (CAFAM), by which Dorguerías Cafam acquired national presence, by beginning operating 91 droguerías of the Exito, Ley and Pomona stores in 30 cities. Exito, on his part, began operating 31 Cafam stores in Bogotá and Cundinamarca.

Source: ILACAD World Retail

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In 2010 Carrefour Colombia entered the Cash & Carry segment with the launch of its emblematic Brazilian Atacadao and, for 2011, the retailer announced their plans to complete their presence in Bogotá and penetrate other cities like Medellín, to which the company entered in March 2011. In addition, the French retailer began operating Carrefour Express stores ea early in 2011.

  • Another retailer that seems to have grown in the Colombian market is the convenience store chain Oxxo that, during 2010, launched 12 stores reaching a total of 17 in its second year in the country.
  • Another retailer that will enter to the country will be the North American retailer Pricesmart that confirmed their entry plans for August 2011 in Barranquilla.
  • Locally we can highlight the entrance of La 14 to Bogotá which, according to the company, will be during May of 2011.
  • Homecenter market in Colombia grew during 2010 and is meant to continue growing during 2011. During last year Cencosud launched new stores under the Easy banner and announced that it plans to continue investing in this segment to increase national presence.
  • On the other hand, Sodimac, launched new stores and said that during the next three years it aims to cover almost the entire country with Homecenter and Constructor stores. Other international retailers such as Almacenes Corona and Home Sentry have also said that they plan to increase the presence in the country.

Source: ILACAD World Retail

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Retailer Ranking Colombia

* Olímpica takes into account the food distribution with: Droguerías 22 and Superdroguerías 22

** Sales includes droguerías

(e ) estimates by square meters

(*1 ) The value “others” includes the difference between total sales and sales by each retailer

Sources: Información de las cadenas – ILACAD World Retail

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Costa Rica

Retail Market Facts – Modern Channel

4,764,000

7,350.23

5.82%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

62

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Costa Rica: Denomination of Retail Formats

Modern

Traditional

Hypermarkets: Their surfaces exceed the 6,000 square meters and they offer over 40,000 SKUs, both groceries and non-food items. Wide client target.

Bodegas:

These stores have surfaces of over 1,500 square meters and offer over 20,000 references. Focus on low prices and proximity.

Pulperias:

Traditional stores that offer an assisted shopping experience through counter.

Mini-Super:

These self-service stores have surfaces of between 100 to 300 square meters.

Supermarkets:

Surfaces vary between 1,500 and 3,000 square meters and they offer from 12,000 to 25,000 references, most of them groceries and fresh produce. Focus on service.

Discount Stores:

Surfaces of between 500 to 800 square meters. The stores offer a limited assortment, including cleaning supplies and personal care items. Usually located at high-traffic areas.

Price Clubs:

Target professional clientelle (other businesses, restaurants, communities). Use a membership system.

Source: ILACAD World Retail

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Costa Rican Retail in 2010:The importance of Stores focused on Low Prices

  • While 80% of the retail sector is focused on offering low prices, last year the Costa Rican retail market was marked by the opening of these types of stores, such as hard discount of bodegas. Overall, the five main chains opened a total of eight new centers. Meanwhile, the supermarket format added nine new stores as well, but hypermarkets closed down during 2010 in Costa Rica.
  • Once again, Walmart held the first position in the Retail Ranking in Costa Rica and opened the most stores during 2010 –five Pali discount stores and three Maxi Bodegas. For 2011, it plans to open 24 new stores by investing a total of 160.5 million pesos –a record investment in Central America so far. Moreover, the group –which operates the Pali, Mas x Menos, Hipermas and Maxi Bodega banners- will change the image of the Hipermas hypermarkets and the Mas x Menos supermarkets, which will soon begin operating under the Walmart banner.
  • Megasuper, which –at the beginning of 2010- had announced the opening of 10 new stores, opened two centers and was acquired by the Colombian group Olimpica in November, therefore, entered the Costa Rican market for the first time.

Source: ILACAD World Retail

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Ranking: Retailers in Costa Rica

(e ) estimated based on total surface and sales per square meter

Source: ILACAD World Retail

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Ecuador

Retail Market Facts – Modern Channel

14,314,000

4,295.6

3.3%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

66

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Ecuador: Denomination of Retail Formats

Modern

Traditional

Hypermarkets:

The surfaces vary betwene 5,000 and 12,000 square meters. The stores offer between 30,000 and 50,000 SKUs, both groceries and non-food items. Wide assortment of general merchandise. Located at suburban areas.

Auto-Service:

Located at high traffic areas, with surfaces of 100 square meters.

Neighborhood Stores:

Traditional store of between 20 and 200 square meters, offers daily-need products, fruits and vegetables.

Supermarket:

Organized by Mini-Supermarkets (-4,000 square meters) and Supermarkets (400 to 5,000 square meters).

Outside Market:

This informal format is oriented to popular sectors and is managed by communities. It mainly offers fresh produce.

Source: ILACAD World Retail

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Ecuadorian Retail in 2010 Ecuadorian Retail: a fast-growing market

  • During 2010, the Ecuadorian retail market was headed by La Favorita, chain that registered an increase in its sales mainly because of nine new openings –especially under the supermarket format. Grupo El Rosado was in second place and Tia held the third spot –even though it operates more stores than the second one. Tia opened seven new stores during the year and has the largest store network in Ecuador’s modern channel.
  • It is important to mention that, in a country where store formats are limited to supermarkets and hypermarkets, the Tia chain entered the proximity store business through Tia Express, concept that was launched in the beginning of 2011.

Source: ILACAD World Retail

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Ranking: Retailers in Ecuador

Source: ILACAD World Retail – Data from Retailers

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El Salvador

Retail Market Facts – Modern Channel

5,864,000

3,717.06

2.13%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

70

el salvador denomination of retail formats
El Salvador: Denomination of Retail Formats

Salvadorian Retail 2010 A year of declines within the retail market in El Salvador

  • During 2010, the two main retailers in El Salvador closed down stores, while only the Europa chain inaugurated new centers. Pricesmart did not change its total store network.
  • The Salvadorian retail industry was once again headed by local chain Grupo Calleja, which operates over half of the total stores in the market. In second place, unlike most Central American countries, we see Walmart –which holds 33.5% of the market share.

Modern

Hypermarkets:

Surfaces of over 6,000 square meters. They offer an assortment of more than 40,000 references, both groceries and non-food items. Wide client target.

Supermarkets:

They have surfaces of between 1,500 and 3,000 square meters and offer between 12,000 and 25,000 SKUs, mainly under the food categories. Focus on service.

Discount Stores:

These stores have sale areas of between 500 and 800 square meters. They offer a limited assortment, such as groceries, personal care items and cleaning supplies. Located at high traffic areas.

Shopping Clubs:

Targets a professional clientele (other businesses, restaurants, communities) and use a membership system.

Source: ILACAD World Retail

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Ranking: Retailers in El Salvador

(e ) estimates based on total surfaces and sales per square meter

Source: ILACAD World Retail

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Guatemala

Retail Market Facts

14,362,000

2,839.00

5.39%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

73

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Guatemala: Denomination of Retail Formats

Specialized Formats

Modern

Hypermarkets:

Surfaces of over 6,000 square meters and an assortment of more than 40,000 SKUs, both groceries and non-food items. Wide client target.

Bodegas:

The stores under this format have surfaces larger than 1,500 square meters and offer around 20,000 items. Oriented to low prices and proximity.

Convenience Stores:

Self-service stores that are usually open until midnight. Strongly oriented towards offering alcoholic beverages

Supermarkets:

These stores have surfaces of between 1,500 to 3,000 square meters and offer around 12,000 to 25,000 references, most under the perishable and fresh produce categories. Focus on service.

Discount Stores:

Surfaces vary between 500 to 800 square meters. The stores offer a limited assortment, that includes basic groceries, cleaning supplies and personal care items. Located at high traffic areas.

Traditional

Fares and Markets:

Outside markets that sell fresh foods.

Stores:

Over-the-counter traditional neighborhood stores.

Price Clubs:

Targets professional clientele (other small businesses, restaurants and communities). Use a membership system.

Source: ILACAD World Retail

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Guatemalan Retail in 2010:The Guatemalan retail grows as discount stores expand

  • In 2010, Guatemalan retail grew hand in hand with discount stores –which represented almost 90% of the total openings made in the country and proving the strong trend of prioritizing low prices.
  • Guatemala’s leading chain was, once again, Walmart –which controls over 75% of the sector. In second place, far behind, is Unisuper, with 11.2% of the country’s market share.

Source: ILACAD World Retail

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Ranking: Retailers in Guatemala

(e ) estimates based on total surfaces and sales per square meter.

Source: Estimates by ILACAD

Source: ILACAD World Retail

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Honduras

Retail Market Facts

7,614,000

2,014.60

N/A

Source: ILACAD World Retail

Population

GDP per capita

Inflation

77

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Honduras: Denomination of Retail Formats

Specialized Formats

Modern

Hypermarkets:

Surfaces of over 6,000 square meters and an assortment of more than 40,000 SKUs, both groceries and non-food items. Wide client target.

Bodegas:

The stores under this format have surfaces larger than 1,500 square meters and offer around 20,000 items. Oriented to low prices and proximity.

Convenience Stores:

Self-service stores that are usually open until midnight. Strongly oriented towards offering alcoholic beverages

Supermarkets:

These stores have surfaces of between 1,500 to 3,000 square meters and offer around 12,000 to 25,000 references, most under the food categories. Focus on service.

Discount Stores:

Surfaces vary between 500 to 800 square meters. The stores offer a limited assortment, that includes basic groceries, cleaning supplies and personal care items. Located at high traffic areas.

Alimenticios Tradicionales

Fares and Markets:

Outside markets that sell fresh foods.

Stores:

Over-the-counter traditional neighborhood stores.

Price Clubs:

Targets professional clientele (other small businesses, restaurants and communities). Use a membership system.

Source: ILACAD World Retail

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Honduran Retail in 2010: The retail in Honduras registered a lower growth in 2010

  • In 2010, the retail industry in Honduras registered a 7.5% increase, 10 points less than what it registered in 2009 (17.5%). Walmart was once again leader in the Honduran retail sector, controlling 41% of the market share and operating over 60% of the country’s total store network.
  • In second place, we can find La Colonia, which inaugurated three of the seven stores opened during 2010. The chain registered a 7.5% increase in its annual sales, same as Walmart and hand in hand with the overall retail growth in the country.

Source: ILACAD World Retail

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Ranking: Retailers in Honduras

(e ) estimates based on total surface and sales per square meter.

Source: Estimates by ILACAD World Retail

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Mexico

Retail Market Facts

108,627,000

9,243.02

4.4%

Sources: ANTAD – ILACAD World Retail

* Does not include convenience stores

Population

GDP per capita

Inflation

81

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Mexico: Denomination of Retail Formats

Modern

Traditional

Hypermarkets:

Surfaces vary between 5,000 to 10,000 square meters. The stores offer a wide variety of products, both groceries and non-food items. Also offer additional services.

Changarros:

Traditional neighborhood store (100 square meters) that offer both private and affordable labels and leading brands.

Membership Club:

The stores have surfaces of approximately 4,500 square meters. They use a membership system and manage large volume of sales and low commercial margins. Target small businesses.

Supermarkets:

Surfaces vary between 500 to 4,500 square meters. The product assortment is mainly made up of groceries and perishables.

Fares and Markets:

Outside markets that sell fresh food.

Convenience Stores:

Surfaces do not exceed 500 square meters. They offer a limited assortment of groceries and beverages. Uthey are focused on the customer service and are open for longer hours than a traditional supermarket.

Bodega:

Surfaces of over 2,500 square meters. These stores offer a product portfolio of around 50,000 references and are located at high traffic areas.

Discount Stores:

Surfaces vary between 500 to 800 square meters. The stores offer a limited assortment, that includes basic groceries, cleaning supplies and personal care items. Located at high traffic areas.

Wholesale:

Surfaces of over 10,000 square meters. Wide assortment of SKUs.

Source: ILACAD World Retail

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Mexican Retail in 2010:Small formats, leaders in the market

  • During 2010, Mexican retail grew by 7.8% in comparison with 2009, reaching a record number of openings as 608 auto-service stores and 1m489 convenience stores were inaugurated. During the year, chains focused on smaller formats, while some increased their surfaces and launched new concepts.
  • It was the case of Soriana, second in the country’s ranking, which launched the Soriana Express format during the year. These stores have surfaces of approximately 1,400 square meters and target clients that belong to the C and D population segments and cities of less than 50,000 residents. During 2010, the group opened 20 new stores under this format.
  • Another retailer that also followed the small-format trend was Casa Ley, which inaugurated new and smaller centers this year. Today, it operates 55 Ley Express stores throughout the country.
  • As far as total auto-service openings in the market, Walmart was once again the group that opened the most –a total of 254 new centers in the country, focusing on smaller formats as well, like the Bodegas Express, format that added 142 new stores during 2010, reaching a total of 389.

Source: ILACAD World Retail

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In 2010, the Bodega Aurrera format continued to expand throughout the country, extending its presence to every corner of the Mexican territory.

  • The first four retailers in the ranking –Walmart, Soriana, Comercial Mexicana and Chedraui (which control 81.7% of the market)- reached a growth of 8% during 2010, while its total surface count increased by 7.9%. Moreover, the four groups opened over half of the total inaugurations registered during the year.
  • It is important to keep in mind that, even though sales and total surface grew in comparison with 2009, the segment’s sales per square meter fell by 0.6%.
  • This phenomenon was caused by a significant growth of total surface count in relation to the growth of sales, which increased much less in comparison with total square meters. This was seen among the first four retailers, which sales grew a little over total surface (8 and 7.9%). The smaller groups, that do not make up the ranbking’0s Top 10, register an increase in sales of 10.3%, while total surface count grew by 14.9%.

84

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Ranking: Auto-Service Retailers in Mexico

(e) Sales were estimated based on turnover per square meter and total surfaces, data from ANTAD.

Sources: Data from Retailers, ANTAD, ILACAD World Retail

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Ranking: Convenience Retailers in Mexico

Fuentes: Datos de cadenas, Antad, ILACAD World Retail

(e) Sales were estimated based on the leading chain’s turnover per square meters and data from ANTAD.

  • In the convenience segment, Oxxo remained leader during 2010, period in which –besides increasing its sales over 16%- it opened a total of 1,092 stores.
  • 7-Eleven holds the second spot in the ranking –and opened 151 centers during 2010, while the third and fourth place were occupied by Extra (253 stores added) and Tiendas K (11 new stores opened).
  • As far as total sales, the convenience store sector grew by 14.6% during 2010.

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Nicaragua

Retail Market Facts

5,816,000

1,096.13

9.23%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

87

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Nicaragua: Modern Food Retail Formats

Source: Estimates by Ilacad

(e ) estimates based on total surfaces and sales per square meter.

Nicaragua: Denomination of Retail Formats

Modern

Traditional

Supermarkets:

These store shave surfaces of between 1,500 and 3,000 square meters and offer between 12,000 and 25,000 SKUs, most of them under the food categories. Focus on service.

Fares and Markets:

Outside sale of fresh fruits and vegetables.

Hard Discount:

Most popular format in the country. Stores focus on low prices and offer daily-need products and basic merchandise.

Stores:

Traditional stores that offer over the counter assistance.

Source: ILACAD World Retail

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Nicaraguan Retail during 2010:Growth and Expansion of the Hard Discount Format

  • During 2010, the Nicaraguan retail market was once again leaded by North American group Walmart, which –at the end of 2010- operated a network of 59 stores. In second place, La Colonia, with 15 centers in the country.
  • Among the seven openings that were registered during the year, four belonged to Walmart’s discount format, Pali –which opened four new centers and has been number one as far as new inaugurations for four consecutive years.
  • Even though Nicaragua’s modern retail channel is still one of the least-developed in the reion, the combined sales of the three main retailers grew by 3.67% during the year. In 2009, sales had increased by 6%.

Source: ILACAD World Retail

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Panama

Retail Market Facts

3,527,000

7,712.00

3.5%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

90

slide91

(e ) estimates based on total surfaces and sales per square meters.

Source: Estimates by ILACAD

Panama: Denomination of Retail Formats

Modern

Traditional

Supermarkets:

These stores have surfaces of between 1,500 to 3,000 square meters and offer around 12,000 to 25,000 references, most under the food categories. Focus on service.

Discount Stores:

Surfaces vary between 500 to 800 square meters. The stores offer a limited assortment, that includes basic groceries, cleaning supplies and personal care items. Located at high traffic areas.

Fares and Markets:

Outside markets that sell fresh foods.

Stores:

Over-the-counter traditional neighborhood stores.

Source: ILACAD World Retail

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Panamanian Retail in 2010: After no openings in 2009, new stores were inaugurated

  • After a year where no openings were registered (in 2009, two stores were closed and none were opened), seven new centers were inaugurated in Panama during 2010.
  • All of these openings belonged to the supermarket format and were made by the leading retailer, Super 99 –which opened three stores, and Super Xtra, which inaugurated one.
  • The Panamanian market –in which the three main retailers have a market share of 71% and operate over half of the stores in the country- has one of the most developed modern channels in Central America and, unlike the remaining countries in the region, Walmart has yet to enter the market.
  • During 2010, annual sales grew once again by 10.10%, driven by new openings –which represented a growth of 5.06% in sales per square meter during the period.

Source: ILACAD World Retail

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Paraguay

Retail Market Facts

6,402,000

2,681.60

7.2%

Estimates: ILACAD World Retail

Sources: Department of National Accounts and Internal Market, Economic Studies, Paraguay Central Bank, Agriculture Department.

Source: ILACAD World Retail

Population

GDP per capita

Inflation

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ranking auto service retailers in paraguay
Ranking: Auto-Service Retailers in Paraguay

Paraguay: Denomination of Retail Formats

Modern

Traditional

Supermarkets:

Organized by Mini-Super (-400 square meters) and Supermarkets (from 400 to 5,000 square meters).

Hypermarkets:

Surfaces vary between 5,000 to 12,000 square meters. The stores offer a portfolio of between 30,000 to 50.000 references and a wide assortment of non-food items. Usually located at suburban areas.

Neighborhood Stores:

Traditional stores that offer over the counter assistance.

e: Estimates based a report on supermarkets published by the Agriculture Department in Paraguay.

Source: ILACAD World Retail

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Paraguayan Retail in 2010:Expanding throughout the country

  • During 2010, the Paraguayan retail market grew once again and sales increased by 13.2%, reaching an estimated turnover of 1,600 million dollars for the modern channel during the year.
  • Even though the number of stores remained constant in comparison with 2009, some retailers –like Stock and Superseis, leaders in the country- chose to remodel some of its stores in order to improve the shopping experience for their clients, instead of openings new centers. For instance, the Superseis store in Villa Morra was not only remodeled, its surface was also expanded and its logo was modified as well.
  • The food retail market in Paraguay, one of the least developed in the region, is strongly concentrated in the country’s capital cities, Asuncion, and its suburbs, while the rest of the country has poor or no access to modern chains.
  • During the last couple of years, however, some retailers started expanding to other cities in the country, such as Superseis –which launched a store in Encarnacion a few years ago, and Stock, which already inaugurated stores in Ciudad del Este and Coronel Oviedo, among others.

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Peru

Retail Market Facts

29,552,000

5,195.90

2.08%

Sources: ILACAD World Retail –Proexpansion Consulting Agency

Population

GDP per capita

Inflation

96

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Peru: Denomination of Retail Formats

Modern

Traditional

Bodega:

Proximity stores which surfaces vary between 40 to 100 square meters. No variety within each category.

Kiosk:

Surfaces vary between 20 to 30 square meters. The stores offer magazines and newspapers and also “impulse shopping products”, at lower prices. Usually located on corners.

Hypermarkets:

Surfaces vary between 5,000 to 12,000 square meters. The stores offer an assortment of betwene 30,000 to 50,000 SKUs, including groceries and non-food items. Usually located at suburban areas.

Market stand_:

Traditional store that has a surface of between 40 to 60 square meters. Offers daily-needed products and is usually located at high traffic areas.

Supermarkets:

Organized by Mini-Super (-400 square meters) and Supermarkets (from 400 to 5,000 square meters).

Independent Mini-Markets:

Surfaces vary between 30 to 50 square meters. Offer a wide variety of products at higher prices than those found at Bodegas and market stands.

Hard Discount:

These stores have surfaces of 250 to 1,200 square meters. They offer a limited assortment of products under basic categories, under private labels and leading brands.

Source: ILACAD World Retail

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Peruvian Retail in 2010:The expansion of large retailers in a promising market

  • The retail market in Peru continues its fast expansion and growth, keeping in mind that only 20% of the retail industry belongs to the modern channel. In spite of that, the market offers great opportunities for the retailer, especially for larger groups –which, during 2010, announced ambitious investment plans in the country.
  • Therefore, during 2010, retailers like Makro, Falabella and Tottus informed their plans to expand their store network during the following years.
  • In the case of Makro, Jose Luis Passano, Commercial Director of Peru, said –while being interviewed by ILACAD World Retail- that the entrance to the Peruvian market represented a great opportunity for the group and that from now on, the chain will seek to “make the wholesale channel more dynamic and focus on smaller businesses”. The group also announced it will soon launch an expansion plan in order to open 15 new stores within the next four years.
  • Other retailers that announced expansion plans during 2010 were Chilean group Falabella, Sodimac –which plans to open 15 centers, and Tottus Hypermarkets, which already invested six million dollars and opened 7 new hypermarkets.

Sources: Data from Retailers, Proexpansion, ILACAD World Retail

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On the other hand, Cencosud –which leaded the market during the year with its Wong supermarkets and hypermarkets and Metro- announced it plans to launch its own department store format, named Paris, in Peru during the first quarter of fiscal year 2012. Once the group enters the department store arena, it will directly compete with the already-established groups, Chilean retailers Falabella and Ripley.

  • During the period, a total of 15 stores were opened and the market registered a 15.6% growth in sales. Falabella registered the largest sales increase, 37.2%, growth driven by the opening of seven new stores. In second place, Supermercados Peruanos’ sales grew by 14% and, finally, Cencosud’s turnover also increased by 7% in 2010.

Ranking: Auto-Service Retailers in Peru

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Puerto Rico

Retail Market Facts

3,982,000

N/A

0.52%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

100

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Puerto Rico: Denominaton of Retail Formats

Modern

Traditional

Store:

Centers that offer a wide assortment of products, especially under the grocery categories. They also offer additional services. como restaurantes, ópticas, etc.

Supermarkets:

Their surfaces vary between 1,500 and 3,000 square meters and offer 12,000 to 25,000 SKUs. Most of them are groceries and fresh produce. Focus on services.

Neighborhood Market:

Traditional stores of between 40 and 60 square meters located in downtown areas. They offer daily-need products.

Independent Mini-Market:

Stores of between 30 and 50 square meters in surface that offer a mixed product portfolio. Higher prices than those found at Bodegas and neighborhood markets.

Hypermarkets:

Surfaces of over 6,000 square meters and an assortment of over 40,000 items, both groceries and non-food. Wide client target.

Members Club:

These stores have surfaces of around 4,500 square meters and use the membership system. Large volume sales and low commercial margins. Targets small merchants and businesses.

Source: ILACAD World Retail

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Puerto Rican Retail in 2010:Walmart and another Bodega-style format

  • During 2010, the Puerto Rican retail industry was marked by the development of a new store concept, the Walmart’s Super Ahorros format, which imitates the Bodega style in Mexico. The new store was opened in the beginning of 2011 in Coamo, adding already two stores under this promising format, which the grouo plans to expand after investing over U$ 300 million during the next five years in the country.
  • During last year, the retail market in the island was headed by North American retailer Walmart, which –at the beginning of 2010- integrated its Puerto Rican financial results with those in the United States.
  • Moreover, the group started building its first metropolitan Sam’s Club Price Club store in the country, which is expected to open its doors during 2011. Also, the group announced that –after being in the country for 18 years- Walmart will open its first store in the country’s capital city, San Juan de Puerto Rico, which will be a double-decker store, the largest one in the country.

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During 2010, there were also acquisitions: The company Empresas Cordero Badillo, owners of Supermercados Grande, finally sold 29 stores to different Puerto Rican businesses, such as SuperMax, Selectos Supermarkets, Hatillo Cash & Carry, Mr. Special, Almacen Frigorifico Perez Hnos and Econo Supermarkets. The reorganization of stores will take place during 2011.

Ranking: Auto-Service Retailers in Puerto Rico

Source: ILACAD World Retail

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Dominican Republic

Retail Market Facts

9,874,000

5,152.00

6.24%

Source: ILACAD World Retail

Population

GDP per capita

Inflation

104

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Dominican Retail in 2010:Supermarket growth and expansion

Dominican Republic: Denomination of Retail Formats

Modern

  • Once again, Dominican retail grew during 2010. Its modern channel’s sales increased by 7% in relation to 2009.
  • Same as years before, the industry was headed by two national chains, Centro Cuesta Nacional and Grupo Ramos, which together operate 54.3% of the country’s total stores –controlling 35 and 21 centers, respectively.
  • As far as the main retailer, Grupo Ramos was once again leader in the market, representing 34% of the channel’s total sales, followed by CCN –with 23% of the market share, and Plaza Lama, which represented 8% and did not register changes in relation to 2009.
  • The modern channel added 18 new stores, registering growth in all its segments –especially in the supermarket format, under which 13 stores were inaugurated. The Price Club concept was the only one that registered negative results, having closed one center.

Hypermarkets:

They have surfaces of over 6,000 square meters and a mixed portfolio of over 40,000 groceries and non-food products. Wide client target.

Supermarkets:

Surfaces of between 1,500 and 3,000 square meters. Offer between 12,000 and 25,000 SKUs, mostly groceries and fresh produce. Focus on additional services.

Traditional

Colmados:

Traditional neighborhood store. Very informal, similar to the Bodegas.

Source: Data from Retailers – ILACAD World Retail

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Uruguay

Retail Market Facts

3,357,000

12,129.70

6.93%

Source: ILACAD World Retail

Population

GDP per capita

Infllation

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Uruguay: Denomination of Retail Formats

Modern

Traditional

Specialized Formats

Hypermarkets:

Stores of between 5,000 and 12,000 square meters in surface that offer between 30,000 and 50,000 SKUs. Wide non-food assortment. Located at suburban areas.

Neighborhood Stores:

Small stores that offer a limited assortment of daily-needed products.

Pharmacies:

Traditional of modern, they sell pharmaceutical products, hygiene and beauty supplies, and may also offer basic groceries.

Kiosks:

Independent stores that sell candy and sweets but mainly drinks and sodas.

Estaciones de Servicio:

Canal de conveniencia poco desarrollado.

Supermarkets:

Organized by Mini-Supermarkets (-400 square meters) and Supermarkets (from 400 to 5,000 square meters).

Auto-service Stores:

Mini-supermarkets and Asian stores –which control a large part of the market. They are considered proximity stores.

Hard Discount:

Surfaces between 250 to 1,200 square meters. Limited product portfolio, focused on basic categories. They offer products under private labels and leading brands.

Source: ILACAD World Retail

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Uruguayan Retail in 2010:Sales growth and store openings

  • During 2010, Uruguayan retailer grew, even though it is a market where the modern channel has not fully developed. During this part year, annual sales in dollars increased by 13.8% and nine stores were inaugurated -adding a total of 229 centers.
  • Among the nine openings, seven were Multiahorro stores –under the supermarket and discount formats.

Ranking: Auto-Service Retailers in Uruguay

(e ) estimates based on information from the market’sleader

Source: Data from Retailers and estimates by ILACAD World Retail

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Venezuela

Retail Market Facts

29,183,000

9,773,20

27.2%

U$S Gov – Government DollarU$S Mcd – Dollar that is not regulated by the government

Source: ILACAD World Retail

Population

GDP per capita

Inflation

110

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Venezuela: Modern Food Retail Formats

Modern

Traditional

Hypermarkets:

Stores of between 5,000 and 12,000 square meters in surface that offer between 30,000 and 50,000 SKUs. Wide non-food assortment. Located at suburban areas.

Convenience stores: Tstores of less than 500 square meters in surface. Limited grocery and drinks assortment. Focused on service and extended open hours.

Traditional Stores:

Abastos, bakeries, pharmacies, traditional beauty and liquor stores.

Low Channels: Bodegas, family shops, food courts, `neighborhood markets, fruit & vegetable stores and government stands.

Hard Discount:

Surfaces between 250 to 1,200 square meters. Limited product portfolio, focused on basic categories. They offer products under private labels and leading brands.

Supermarkets:

Organized by Mini-Supermarkets (-400 square meters) and Supermarkets (from 400 to 5,000 square meters).

Specialized Formats

Mercal:

Store network operated by the Venezuelan government that offers daily-need products at lower prices than at other stores. The network is made up by a total of 15,743 stores under the Centros de Acopio, Supermercal, Mercalito, Mercales moviles, Tipo I and Tipo II banners in 25 departments in the country. This retailer works under a similar scheme as the auto-service stores.

Drugstores:

Originally operated under the pharmaceutical sector, today they are considered auto-service stores that also offer general merchandise. The Farmatodo and Farmahorro chains are leaders in this sector and have a 25% market share in the drugstore industry.

Source: ILACAD World Retail

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Venezuelan Retail in 2010: Cativen’s expropriation and the creation of Abastos Bicentenario

  • During 2010, the Venezuelan retail industry was marked by the nationalization of the Cativen chain, which is now owned by Hugo Chavez’s government. In mid-January, the Venezuelan President announced the expropriation of the Colombian-French group after accusing the chain of increasing prices after the Bolivar devaluation.
  • After this announcement, six Exito hypermarkets and 35 Cada de Cativen supermarkets, owned by Casino, became part of the Socialist Market Corporation, a government-created network in Venezuela that works towards eliminating intermediate party costs and, therefore, lower prices.
  • By mid-June 2010, the Venezuelan government inaugurated the first Abastos Bicentenario store, replacing one of the expropriated Cada supermarkets.
  • In November 2010, after months of negotiations with Casino, the Venezuelan government announced it would own the majority stake and shares of Cativen, purchasing 81.2% of its total shares. Casino, on the other hand, retained the remaining 20% and keeps offering its technical assistance and cooperating with the national government.
  • Today, the stores are going through a reconversion process: the Cada stores will now operate under the Abastos Bicentenario banner and the Exito hypermarkets will now be called Bicentenario.

Source: ILACAD World Retail

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As far as the sector’s total sales during the past year, we can see a 17.2% increase in the local currency. However, keeping in mind the inflation at a constant exchange rate, the turnover in dollars during the period fell by 41%.

  • Even though the number of stores remained constant, there were some openings during the year: three Central Madeirense supermarkets, two Unicasa stores and three Excelsior Gama.
  • On the other hand, Makro –which opened 17 Mikro stores in 2009- kept 13 opened in 2010 since the format did not obtain the results the chain expected.
  • The opening pace was much slower than in 2009 mainly because many pre-existing stores were reconverted, causing the retailers to invest on remodeling and not on opening new centers.

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Ranking: Auto-Service Retailers in Venezuela

(e ) Estimates based on sales/square meters projections, including only ANSA-affiliated chains and sales under the “Sales of non-specialized store that offer a mixed assortment, focusing mainly on groceries, drinks and tobacco” category, published by the Venezuelan Central Bank.

*Central Bank currency exchange - VEF$ 4.3

*Street Market currency exchange - VEF$ 9.25

Source: ILACAD World Retail estimates based on ANSA data

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Conversion Table(corresponds to each year’s annual average)

Source: ILACAD World Retail

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