Monday, April 5, 2010

Brazil: Retail Competition Heats Up

Companhia Brasileira de Distribuicao Grupo de Acucar (CBD) is Brazil's largest retailer, with $13 billion in annual sales. But now Walmart is coming on strong. It's #3 in Brazil (Carrefour is #2) and the president of Walmart Brazil says the firm has "a very, very clear plan to win here in Brazil," according to this week's BusinessWeek.

The scramble for market share is shaping up as a costly, high-stakes battle of global giants against a regional powerhouse retailer that has the distinct advantage of knowing the local market extremely well. (CBD, as noted in Chapter 8 of my new Marketing Plan Handbook edition, is a distribution expert and is diversifying to further solidify its considerable strength.) Can CBD leverage its leadership position to keep shoppers loyal?

Euromonitor reports that Brazil's economy is improving, consumers are spending, the infrastructure can support retail expansion, and online shopping is growing. No wonder Walmart and Carrefour see great promise in Brazil, and are digging in for the long term. Between now and 2012, Carrefour plans to invest $1.4 billion on new stores and aggressive marketing. This year alone, Walmart will spend $1.2 billion on expanding its Brazilian operations.

The big three retailers are taking their marketing up a notch, and consumers are the biggest winners of all.

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