brazil report 2007

So paulo and rio de janeiro states account for 134

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Unformatted text preview: d retail, where the share of the top-five retailers is estimated at around 60%. Acquisitions and further concentration is likely to be seen in non-food retail, where large regional domestic players are intensifying the competition and expanding their activities to other regions. The ability to integrate the acquired operations will determine the level of consolidation and how strong these current regional players will be. A concentration process is also expected to take place in some manufacturing segments of the consumer products sector, such as dairy products, cookies, pasta and coffee among others. Increase in private labels In many cases, private labels have been recognised by customers as an effective way of assuring quality. This perception is a remarkable achievement of retailers, since private label products normally offer better levels of profitability. Private labels in the segments of apparel and accessories have also been a good opportunity to enhance margins, since these categories of products already offer a higher level of profits when compared with food and beverage products. 23 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil Multiplying retail formats Retailers in Brazil should be prepared to operate in different or even multiple retail formats as a consequence of the various types of consumers or group of consumers. In addition, the intrinsic concepts of each format should not be considered to be immutable, but instead dynamic, in a constant transforming process, because consumer needs and behaviour are dramatically changing. Examples are hypermarkets which have expanded non-food products space to the detriment of food categories, and department stores which have expanded or formed grocery areas, reducing apparel or footwear slots. Convenience, more than a retail format definition, is in fact a synonym of a new pattern of consumers which has been moulded and influenced by big urban centres. Understanding this consumption pattern is likely to lead to the incorporation of the principles of convenience into most of the existing retail formats. E-commerce should also be seen as wave that cannot be stopped; availing of this opportunity will probably be the difference between survival or submersion. 24 Case Study I Companhia Brasileira de Distribuição – A pioneering multi-format retailer KEy DRIVERS Increasing competition and a heterogeneous consumer base make Brazil a very challenging market for retailers. Different consumers have different demands and retail success lies in addressing the full range of customer needs at the same time. What are keys to success in this complex environment? Companhia Brasileira de Distribuição (CBD), well known for one of its brand names – Pão de Açúcar, is the largest retail chain in South America with annual revenues of around USD7 billion. Despite the presence of global heavyweights such as Carrefour and Wal-Mart, it has been successful in...
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