Monday , March 20 2023

This is how Grupo Rey's competition in retail trade in Panama works


From Daniel Zueras and Luis Sierra,

They deal with informal or semi-informal facilities (more than 15,000 businesses of different ethnic origins and forms), which sell 55% of estimated annual sales of $ 8,000 million.
"Competitive, more and more diverse, more and more specialized, but with opportunities for those who adapt and know how to offer their customers a good product," says Muntaner, the retail sector in Panama.

Read also: Grupo Rey, the monk of the Panama gondola

This market is particularly important: large retailers are opening more and more square meters for a market that is not growing at this rate.

According to Grupo Rey's general manager, Hernán Muntaner will be more and more competitive, "but we believe there will be a great opportunity to get better prices and better quality products in places in Panama where there are not even those types of surfaces. "
In addition, Muntaner says that some international groups and chains arrive. "The contest welcomes – of course – that it makes us all better and benefits consumers," such as the Chilean investment group that has invested in Grupo Extra or the landing of Justo y Bueno, a small molding chain that already has 18 stores

Whenever Walmart's possible arrival in the country exceeds, as Panama is the only country of the Isthmus in which it has no presence. It is possible "I do not deny and we do not know that something may happen," says former Walmart expletive. "However, he believes that retail is a very local business where customers buy their favorite brands.
"And in the case of Panama, a very good part of the brands sold are local brands. There will probably be some kind of merger, acquisition, arrival of international players."
On the other hand, a large number of small, family-run businesses are growing, which are growing and becoming officially.

Also read: What are the supermarket brands in Central America's Top Of Mind 2018?

These are the main brands of supermarkets at the top of the mind of Panama:

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How do you grow in a market that seems more and more saturated? Héctor Muntaner is betting on what Panama knows as "los chinitos", small informal neighborhood shops running people of Chinese nationality. "There I believe there is a great opportunity, because the informal channel is still very poor." These businesses operate in these neighborhoods or cities where people need the lowest prices, however, with the most expensive shapes.

He acknowledges that the official city market is semi-saturated, but "we believe there is a great, great opportunity to get to places where we have not arrived."
This opportunity for Rey will come "through the logistics, construction, purchase and operations can form formal forms, neighborhoods of socio-economic CDE levels, with better quality products and lower prices," says the executive.

The business is changing by jumping. Inside and outside Panama. "We've seen many improvements to our competitors, sales floor improvements."
But the change in surfaces is not the only one. E-commerce is a barrier to retail. It is undeniable and is already happening in Panama, Central America, and around the world. More and more products are consumed that the customer buys over the internet, from different forms of delivery. "There is already the influence of the Amazon and the various global competitors that arrive with products in Panama," says Muntaner.

In any case, Grupo Rey's Managing Director is convinced that "our work is food and mainly perishable" and that we see the strategies of the giants in countries much more mature and more infiltrated in e-Comverce, "I think the latter where it will penetrate and grow quickly will be perishable because people want to buy their tomato and lettuce in natural form. "

Of course, there will be more and more market and penetration by electronic means. For Grupo Rey, there is no imminent concern yet. "Yes, we are going to participate, but as long as the market requires it".

PwC data is clear in e-commerce. China is the world's biggest reference to e-commerce: 73% of its consumers are buying online every week. The lag in the region is important.
According to the Kantar WorldPanel consultancy, in the first half of 2016, only 7% of Central Americans made online shopping in these six months, with Costa Rica (12%) and Panama (8%) leaders. ILifebelt's estimates show that 22 million Central Americans were linked in the first half of 2018.

Grupo Rey Panama-DSC06208 (800x600)

In each case, physical stores are not going to disappear. At present, 90% of total retail sales are made in physical stores. Yes, everyone has to adjust, including grocery stores, Deloitte says in his report "The 2018 Retailer's Global Powers", which in some countries are already moving from suppliers of goods to service providers and solutions, health and well-being "converging into a retail environment". Some already have health clinics, nutritionists, nutritionists, and even gyms in their field.

The Deloitte exhibition identifies four major global trends: it designs and builds first-class digital capabilities. Combine sales online and offline. create unique and interesting shopping experiences in physical stores. and renew your retail with the latest technologies.

Euromonitor International notes that the retail sector in Latin America has increased by 7% in 2017, and by 2022 an annual growth of 3% is expected. From this global market research company, it is pointed out that "the Latin American retail market has to cope with some form of change where the new entrant retailer calls online to re-understand the consumer. We observe a consumer who is worried about the increase in value of each ticket he is looking for offers and adjusting his purchases to them, which does not hold loyalty to brands or retailers and is not afraid to question them about the issues they have. "

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