Grupo Éxito: Facing Colombia's Competitive Grocery Retail Industry
Grupo xito, a leading South American retailer, faced declining market shares in Colombia in 2019 with the arrival of low-cost competitors and emerging digital trends. Originally founded in Medell n, xito had over the course of its seventy-year history evolved from a small textile shop into a retail powerhouse, with 1,533 stores and operations in 2018 across four countries in South America and $18.6 billion in consolidated revenues. In its home country, xito had grown through a series of acquisitions, consolidating a multi-brand and multi-store format strategy to cater to customers across all income segments. By 2018, the company had a total of 554 points of sale across the country. However, with the arrival of hard discount retailers, xito began to gradually experience a decline in its market shares, particularly at its low-cost store brands. Colombian consumers were also changing their grocery shopping habits, as they became more digitalized. Not only were retailers beefing up their digital retail platforms by launching new applications with personalized services, but they were also allying with partners such as Rappi-Colombia's largest last-mile delivery company- to speedily deliver products to customers' homes. Carlos Mario Giraldo, xito s Chief Executive Officer since 2013, and top management were faced with the challenge of simultaneously maintaining xito s vast operations in the country and battle the current and upcoming threats in the competitive Colombian grocery retail market. Should the company battle head to head with discounters or bet on differentiated strategies at its more premium stores and digitalized ways to serve customers? Would these strategies pay off and allow xito to gain more market share in the future?