Distribucion y Servicio (D&S) holding, the largest operator in Chile’s supermarket sector, plans to invest US$144m in the construction of 12 new outlets. D&S, which operates 38 outlets in the Ekono, Lider and Almac chains and prodcues 27.8% of domestic supermarket sales, is seeking to consolidate its market position following increased competition from multinationals.
Disco/Ahold-owned Santa Isabel, the second largest operator in this sector, recently acquired the Agas chain to improve its performance in the Santiago region, home to a third of Chile’s 15m inhabitants. It now has a 12.1% market share.
D&S will meanwhile focus on building 12 new operations outside the capital. It recently purchased a site in southern city Punta Arenas and is looking to obtain similar sites in far northern and central-southern Chile for the remaining 11 outlets.
D&S also hopes to reduce its operational costs, which reached US$787m for the first nine months of 2000, the equivalent to 78.1% of the company’s gross income. “We have to be prepared to compete in the major leagues, which is why we are focusing on reducing operational costs,” said executive director Cristobal Lira.
D&S is also focusing on reducing theft from its stores, which represents 2.1% of all sales. In Chile, the supermarket sector loses US$100m every year, 3.2% of all sales, which reduces investor confidence in the country. In comparison, thefts equate to only 1% of total income in the US.
By Steve Anderson
