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The Acquisition That Shook The Stock Market This Friday, 15, Was The Buy Of Extra Hiper By Assaí. The Pão de Açúcar Group Sold To Assaí Atacadista 71 Units Of The Extra Hiper Brand For R$ 5.2 Billion.
The Pão de Açúcar Group stepped back from the hypermarket sector after selling 71 units of the Extra Hiper brand to Assaí Atacadista for R$ 5.2 billion. Not all Extra Hiper stores were sold; there are still 32 left that should be converted into other formats by the Pão de Açúcar Group.
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Pão de Açúcar Group Hypermarket Format Was Facing Difficulties
According To The CEO Of GPA, Jorge Faiçal, The Sale Was Made Because The Hypermarket Format Had Been Facing Difficulties For Some Time. According To The CEO, Hypermarkets, Such As Extra, Have Been Struggling With Inflation And Customer Losses For A Decade.
According To Faiçal, The Rising Cost Of Food And Other Products Led Customers To Stop Visiting Extra Stores And Opt For The Cash And Carry Format, Which Combines The Two Formats And Offers More Advantageous Options.
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With Inflation In Double Digits Since Last Year, The Migration Became Even More Intense. For Faiçal, The Hypermarket Format No Longer Made Sense To The Pão de Açúcar Group. Being An Expensive Store To Maintain, It Needed Very High Sales Per M² To Sustain Itself. With The Sale Of Extra Units To Assaí Atacadista, GPA Also Bids Farewell To Electronics And Clothing. It Plans To Continue Selling Home Products, Flip Flops, And Bed And Bath Items.
Assaí Atacadista Claims Products Are Cheaper In Cash And Carry
Assaí Is Part Of The Same Controlling Group, The French Casino, And Until March, Was One Of The Brands Of The Pão de Açúcar Group. The Companies Announced Their Split Over A Year Ago, And In March Assaí Attacked The Stock Market With The Code ASAI3.
According To Assaí Atacadista’s President, Belmiro Gomes, Products In A Cash And Carry Store Are Up To 15% Cheaper Than In A Hypermarket. According To The President, With Greater Price Pressure And Falling Incomes, The Cash And Carry Format Is More Sought After.
Consumers Choose Cheaper Brands And Stores, And A 15% Difference On A R$ 600 Bill Amounts To R$ 90. The Family Can Add Other Items To The Cart That They Couldn’t Include Before.
Extra Hiper Will Not Disappear
By 2024, The Pão de Açúcar Group Plans To Open 100 New Minuto Pão de Açúcar Stores And Another 100 Pão de Açúcar Stores, Which Are Smaller Proximity Formats, In Addition To Renovating 185 Existing Stores.
Thus, 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 States That Its Expansion May Involve Acquiring Regional Chains.
According To The CEO, To Enter Belo Horizonte, For Example, It Would Require Dozens Of Extra-branded Stores, While Only 3 Pão de Açúcar Stores Would Be Needed.
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