Falabella considers creation of small grocery stores in Peru



Saga Falabella in Miraflores. (Photo: Streets of Lima blog)

Juan Benavides, general manager of the corporate holding Solari family, Del Rio and Cuneo said his company is analyzing the expansion of a small-scale grocery store within its Saga Falabella department stores.

"Already there are large supermarkets as well as the average grocery stores, however we have a smaller model of about 800 square meters, which is being tested (in Chile), and it’s working quite well," said Juan Benavides.

The idea is still a work in progress that needs further defining and it is not certain whether the change will come to Peru this year.

In Peru, 35 percent of sales in Tottus is non-food items. In Chile the figure is 10 percent. The chain hopes to increase the presence of non-food products in Peru.

Although the Falabella stores and Sodimac are "strong in their sales of non-food products, each company has its niche market, differentiation, and segmentation" so the competition among the stores would not hurt the company, said Benavides.

With the strength of non-food products at Tottus, the store "could add more square feet to the premises and introduce its own store brand as well as offer more imported food items," he said.

The company hopes that its Chilean market share will move from 7 to 10 percent, while in Peru it has already exceeded 22 percent. The company has 31 supermarkets in Chile and 24 in Peru.

The company has announced investments of more than $3.5 billion during the next four years.