Results

• Revenues grow 177% over a 6-year period
• Margin improves by 2.72 percentage points after the first negotiations with consumer goods suppliers
• A B2B platform is introduced to monetize data with CPG suppliers, generating more than USD 2 million per year, four times the initial amount previously received from CPG suppliers in data exchange fees
• EBITDA grows from 6% to more than 10% over a 5-year period

Initial Situation

Second player in the Supermarket sector, with a 20% market share in 2020. Walmart is the leader with more than 50% market share.
Until 2013, the chain had recorded strong growth mainly due to mistakes made by the competition. The competition was going through a transition phase following Walmart’s acquisition of CARHCO.

However, starting in 2013, the EDLP strategy and aggressive store openings drove strong growth for Wal-Mex in Central America. Our Client’s growth began to slow down, EBITDA stagnated, and the CEO foresaw the beginning of a much more challenging phase, which led him to hire EREA’s services.

Project Objective

Redefine the company’s strategy to align it with market changes.
Implement a plan enabling the company to maintain and exceed the sales growth levels of previous years (CAGR around 15%).
Progressively improve EBITDA to double-digit levels by 2020.

Methodology

The project began with a renegotiation of Trade Terms with CPG suppliers and the development of the 2014–2020 strategic plan, which included several initiatives for the coming years (organic growth improvement plans, expansion plans and new format development, organizational restructuring, supply chain initiatives, etc.).

• Work was done on the organizational structure, and new departments were created.
• The marketing message and strategic positioning were changed.
• The entire marketing mix was improved, as well as in-store merchandising.
• Detailed budgets were developed and combined with a set of objectives tied to variable compensation for first- and second-line executives.
• Core processes were redesigned, and significant effort was placed on the change management process.