Emerging Markets
B
razil’s top supermarket groups have stolen the spotlight in Latin America’s retail scene, and the ownership struggle between Casino’s Pao de Acucar, its founder Abilio Diniz and Carrefour still looks far from over. Meanwhile, Chile’s Cencosud is discreetly gaining ground in the regional rankings using acquisitions of medium and small supermarket chains in Brazil to boost its ascent. With reported revenues of CLP 7.6 trillion (US$15.4 billion) in 2011, Cencosud has surpassed Carrefour Brazil as the third largest retailer in Latin American countries after Walmart’s Mexican operation, Walmex, and Pao de Acucar. The Chilean group Cencosud, owned by Horst Paulmann, a German-Chilean businessman, also became the largest Latin American-owned supermarket in June, after France-based Casino finally acquired a controlling stake. Walmex reported US$24.6 billion in revenues in 2011, and Pao de Acucar, as Companhia Brasileira de Distribuicao (CBD) is known, reported R 46.6 billion (US$22.8 billion). Carrefour France reported net sales of EUR 11.1 billion (US$13.6 billion) in Brazil in 2011. Meanwhile, in 2011 Cencosud more than doubled its gross sales in Brazil, from R 3.5 billion in 2010 to R 8.9 billion in 2011, according to data from the industry union Abras compiled by Deloitte for this report. Its growth comes in large part from a steady acquisition campaign in Brazil.
In the Brazilian market, Cencosud doesn’t yet look threatening, as it still occupies a distant 4th place in the rankings. According to the Deloitte data, CDB has an estimated market share in Brazil of 23%; Carrefour, 13%; Walmart, 10%; and Cencosud, 4%. In Brazil, rumors now have turned to the possibility of Diniz selling his 20% stake in CBD to Casino and buying a stake in Carrefour. However, a spokesperson for Diniz denied he is in talks with Carrefour. This comes after a mid-2011 announcement from Diniz that CBD would merge with Carrefour Brazil, reportedly an attempt to dilute Casino’s
stake in CBD and avoid giving up the controlling stake. The plan was canceled 2 weeks later, under protests from Casino. After Casino assumed control, Diniz retained a 20% stake in CDB, valued at R 4 billion, and remained CDB’s chairman. The current speculation is that Diniz’s difficult relationship with Casino in recent years will lead him to again seek an alliance with Carrefour. For Carrefour, a deal with Diniz would help smooth out the group’s global turbulences, said a Brazil-based sector banker. A spokesperson for Carre-
PREMIUM CONTENT CLICK HERE TO SUBSCRIBE 45