In Chilean hands

This narrow country along the Pacific coast of South America has produced two of the most expansionary trading groups on the continent: Chile is home to both the Falabella Group and to Cencosud. Both companies also operate in Argentina and Columbia, and Falabella in Peru as well. However, the Sodimac DIY retail subsidiary of Falabella is the undisputed market leader in Chile, with a current total of 66 stores. The chain represents 39 per cent of sales re­venue. The 31 Easy stores of Cencosud, which have a twelve per cent market share, are next in line, but only at a great distance according to calculations by Euromonitor, an internationally active market research company. Also in local hands is the third relatively large chain in the country, Construmart, which belongs to Hipermarc and has 38 stores following increased expansion last year. Sodimac and Easy are very similar in appearance. This relates to store design, customer cards and pricing above all, as well as installation and repair services. Sodimac intends to go further by repositioning itself through eco-friendly products and a range that has been expanded in the décor, electronics and appliances, homewares and furniture categories. As with Easy, the company’s policy of accepting a variety of different methods of payment is very popular with customers. This is precisely what the numerous smaller companies are lacking. Together they account for the other half of the market, though their market shares are getting smaller and smaller. Euromonitor’s latest count reveals just under 6 000 sales outlets in Chile. The market is rated as saturated in the capital, Santiago de Chile. An additional hurdle here is the high cost of leasing or buying the appropriate real estate. That is the flip side of a development from which the sector has otherwise benefited tremendously: both building industry and real estate market are booming. Sales of the home improvement and gardening stores saw growth of no less than nine per cent last year to a market volume of CLP 3.5 bn. The Euromonitor forecast predicts that growth will remain stable in the next few years, though at a lower level of around two per cent annually. It is expected that this growth will be sustained by the big chains, which are investing in customer-loyalty programmes and training for their personnel. The smaller hardware stores, on the other hand, will tend to fall behind. On track for growth Having embarked on a clearly expansionary track, Falabella’s…