Makro

Makro is a food cash-and-carry company targeting professional Horeca customers and end consumers. The chain’s current strategy is aimed at reinforcing its position as relevant partner for both target groups, significantly increasing its customer base and visit frequency by providing an overall better shopping experience. At the end of 2022, Makro operated 106 stores across Argentina, Brazil, Colombia, and Venezuela.  

Vaccination programmes across all Makro countries allowed governments to ease restrictions. Yet political instability and tight monetary policies continued to negatively affect the economic outlook. High inflation and interest rates slowed down consumer spending across most markets. Makro continued to implement its new food cash & carry model while at the same time focusing on overall cash preservation, including strict cost controls and limited investments.

Within the food cash and carry strategy a number of (ongoing) initiatives have been implemented during the year to drive future growth. Establishing and maintaining a balanced assortment to existing and evolving customer needs, and the further development of own brand products to increase customer loyalty and margin performance. Fresh food is one of the areas of differentiation with competitors by offering a better, deep and high quality selection of products and a more personalised customer experience.

Makro Brazil was particularly impacted by strong competition within the Cash & Carry sector, with the São Paulo region seeing a record amount of new stores opened by leading players. This has led to aggressive promotions from competitors and increased pressure on margins. Several mitigating actions were put in place to boost sales while keeping tight control over costs. Following the sale of Makro stores outside the São Paulo region that started in 2020, in the beginning of 2023 another 16 stores were sold and looking for options to sell the remaining 8 are ongoing. 

Makro Argentina has had to deal with a thorough economic crisis leading to both high inflation and government-imposed price regulations aimed at increasing consumption. Combined with disruptions in the supply chain, these conditions made it difficult to build and maintain adequate stock levels and meet customer demand in a cost efficient manner. Even so, the company saw growth in both store traffic and margins. It has also launched a new partnership with a third party delivery company in a number of stores. This will be implemented in the remaining stores across the country during 2023.

While the Colombian government continues to pursue a number of social and economic initiatives, economic growth slowed in the face of falling consumption and rising inflation. Nevertheless, the recovery at Makro Colombia that started in 2021 continued in 2022. The implementation of the Food Cash & Carry concept is demonstrating promising results with solid customer growth accompanied by higher sales and growing margins. 60% of stores have now transitioned to the new Food Cash & Carry concept. As a result Makro Colombia increased its market share.

Operational results were negatively impacted mainly by the challenges that Makro Brazil faced.  Overall, the performance was lower compared to 2021, due to a delay into 2023 of the transfer of sold stores outside the São Paulo region.