Brazilian retailer CBD plans to increase its investment in expansion in its domestic market this year.
CBD, also known through its trading name of Grupo Pao de Acucar, has earmarked BRL1.96bn (US$1.07bn) of investment, up from the BRL1.58bn spent last year,
It will look to open more units, acquire land, and build and convert supermarkets across Brazil, it said. Money will also be spent on infrastructure, IT and logistics.
The investment will be funding from its own cash in addition to loans via Brazil’s national development bank, BNDES, and from debentures issues, the company said in an emailed document.
A spokesperson for CBD told just-food the investment amount is expected to be passed for approval and made public next month.
In a separate announcement, CBD reported a 10.4% increase in gross sales to BRL13.66bn from the year-ago period.
The retailer cited an “outstanding performance” from its Assaí, Minimercado Extra and Ponto Frio banners as reasons for the growth. Same-store sales were up 9.6% over the same period. Sales in CBD’s food category increased 9.4% in the quarter.
In the three-month period, the retailer opened two stores, in addition to five conversions from Extra Fácil to Minimercado Extra. Another 14 stores are under construction, it said.
Last month, French supermarket operator Casino initiated the process to take sole control of CBD
Casino and Brazilian tycoon Abilio Diniz have jointly managed CBD since 2005. According to Casino, a contract between the two allows the company the option of becoming CBD’s sole controlling shareholder on 22 June this year.
The relationship between Casino and Diniz started to publicly sour last year, when the tycoon proposed a merger between CBD and the Brazilian arm of Carrefour. The merger attempt ended amid opposition from Casino shareholders, which led BNDES, which was set to part fund the deal, to back away from the idea.