The acquisition that shook the stock market this Friday, the 15th, was that of Extra Hiper by Assaí. Grupo Pão de Açúcar sold 71 units of the Extra Hiper brand to Assaí Atacadista for R$5,2 billion.

Grupo Pão de Açúcar, left the hypermarket business a little aside after selling 71 units of the Extra Hiper brand to Assaí Atacadista in the amount of R$ 5,2 billion. Not all Extra Hiper stores were sold, there are still 32 left that should be converted into units of other formats by Grupo Pão de Açúcar.

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Grupo Pão de Açúcar format of hypermarkets was experiencing difficulties

According to the CEO of GPA, Jorge Faiçal, the sale was made because the hypermarket format had already been facing difficulties for some time. According to the CEO, a hypermarket, like Extra, is a format full of deadlocks with inflation and loss of customers for a decade.

According to Faiçal, the increase in the cost of food and other products made customers stop going to Extra stores and opt for the cash and carry format, which combines the two formats and has more advantageous options.

With double-digit inflation since last year, migration has become even more intense. For Faiçal, the hypermarket format no longer made sense for Grupo Pão de Açúcar. Because it was an expensive store to run, it needed very high sales per m² to sustain itself. With the sale of the Extra units to Assaí Atacadista, GPA is also saying goodbye to electronic items and clothing. It should keep selling products for the home, slippers and table and bath products.

Assaí Atacadista says that products are cheaper in Wholesale

Assaí is part of the same controlling group, the French Casino, and until March, it was one of the brands of Grupo Pão de Açúcar. The companies announced the split more than a year ago and in March the wholesaler Assaí debuted on the Stock Exchange under the code ASAI3.

According to the president of Assaí Wholesaler, Belmiro Gomes, products in wholesale can be 15% cheaper than in a hypermarket. According to the President, with the greater pressure for price and the drop in income, the cash and carry format is more sought after.

Consumers choose cheaper brands and stores and a difference of 15% on a bill of R$600 reaches R$90. The family will be able to add other items to the cart that could not be placed before.

Extra Hiper will not leave the scene

By 2024, Grupo Pão de Açúcar intends to open 100 new Minuto Pão de Açúcar stores and another 100 Pão de Açúcar stores, in the format of small and proximity units, in addition to renovating 185 stores already built.

Therefore, the expansion and construction team will triple. The group will also invest in online sales. GPA made it clear that the Extra brand will continue to exist, and Faiçal says that its expansion involves possible purchases of regional chains.

According to the CEO, to enter Belo Horizonte, for example, dozens of stores with the Extra brand would be needed, while only 3 stores with the Pão de Açúcar brand would be needed.