LOS ANGELES — Grupo Gigante, one of Mexico’s top four retailers and one of Wal-Mart de Mexico’s chief competitors, will open its first three stores in this city later this year. This will bring Gigante’s store count north of the border to seven.

In its press release Monday, the Mexican retailer said it decided to accelerate its expansion into the U.S. because of the growth of the Hispanic population in the U.S., now representing 13 percent of the total population. The company also said the strategy is designed to offset market share losses to Wal-Mart.

Hispanics in Los Angeles have per capita incomes of nearly $30,000, or five times larger than Grupo Gigante customers in Mexico, the company said.

Grupo Gigante has been launching one store per year in California since 1999. Stores in the state are located inAnaheim, Santa Fe Springs and Pico Rivera. The company operates 479 units selling grocery, apparel, audio-visual and electrical merchandise and estimated annual sales of $3 billion. It is projecting a 7 percent decline in same-store sales for 2003 because of price reductions and a drop-off in customers.

By contrast, Wal-Mart de Mexico, with 604 units, notched a 15 percent increase in net income in fiscal 2003. Wal-Mart does not break out sales in Mexico. The company’s total international sales reached $41 billion in 2003, according to a spokesman.

By accelerating its expansion, Grupo Gigante hopes to attain higher sales volumes and better prices with suppliers. The company also hopes to offset its decline in same-store sales in other regions.

Grupo Gigante spokesman Manuel Cullen said in a statement, “There was always an intention to grow at a faster pace but for one reason or another it hasn’t been possible. Now we’re maintaining the intention to expand. We’ve learned, and the results are coming quickly.”

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus