Raízen-Femsa partnership opens 1st Mexican retail chain store OXXO in Brazil

The opening of stores in the Mexican chain OXXO marks Raízen's entry into the proximity retail segment in Brazil

Photo: REUTERS/Daniel Becerril
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  • Raízen currently operates convenience stores in the Shell gas station chain in Brazil;
  • The company’s plans involve opening five OXXO stores in Campinas by December, to start expanding the chain in other places in 2021.

Grupo Nós, a joint venture between the Brazilian company Raízen and the Mexican company Femsa, opens on Tuesday the first store of the OXXO retail chain in Brazil. It will be in Campinas, and Grupo Nós has plans to debut OXXO’s stores in the capital of São Paulo until the second quarter of 2021.

Raízen currently operates convenience stores in the Shell gas station chain in the country and the opening of stores in the Mexican OXXO chain marks the company’s entry into the proximity retail segment, which, according to the executive president of Grupo Nós, Rodrigo Patuzzo, it is still underdeveloped in Brazil.

READ ALSO: Amazon now allows OXXO’s payments in Mexico

“It is a market that has great potential,” said the executive, adding that, in Brazil, the segment is still very fragmented, unlike other countries where it is already quite developed. In the country, the OXXO network will face groups like GPA and Carrefour Brasil in the segment.

The company’s plans involve opening five OXXO stores in Campinas by December, to start expanding the chain in other places in 2021.

READ ALSO: After an episode of violence against a Black man, Carrefour announces measures against racism

“We have a partner who already operates 19,000 OXXO stores in Latin America … who is bringing his work system, process connection, fractional logistics know-how, commercial knowledge,” said Patuzzo about Femsa.

The companies announced the joint venture in August last year, with Femsa paying BRL 561 million for the stake. Raízen, the largest sugar, and ethanol producer in Brazil, also operating in fuel distribution, is a joint venture between Cosan and Shell.

The first OXXO store in Campinas will open with a sales area of ​​100 square meters and offer products that include bakery items, drinks, and snacks. The unit occupies the address of a bakery that operated for decades and ended its operation during the pandemic.

READ ALSO: Mexico’s Femsa, owner of OXXO stores, to pay $398 million in taxes

According to Patuzzo, another OXXO market will open to the public as early as next week and other stores by the end of the year. According to him, in total, there are 15 chain stores under construction in the city. He did not give projections of billing but said that a unit requires approximately BRL 750,000 in investments, including working capital.

In addition to Campinas and São Paulo, the expansion plans include negotiations for openings in Jundiaí and Sorocaba, with the opening strategy starting in the State of São Paulo, but with the goal of already entering other cities in the Southeast of Brazil and Paraná state in the first years.

“If everything goes well, in October next year we will put a foot in our second state,” said the executive, without elaborating.

For the years between April 2020 and March 2021, Grupo Nós plans to open 190 own stores of the OXXO and Shell Select brands (convenience) in the country, a number that should accelerate even more in the following year. Patuzzo, however, preferred not to give figures, citing that the plan has not yet been approved.

READ ALSO: Oxxo, the biggest network of convenience stores in Latin America, has its sights set on Brazil

In three years, the group estimates the opening of about 500 own stores, including the Select and OXXO banners. Select already has 1,100 stores in operation in the country.

In addition to the street units, the group’s strategy includes placing OXXO markets in shopping centers, hospitals, universities, and even condominiums, among other locations.

“We are partnering with real estate funds to enter the capital of São Paulo in some interesting developments”, said the executive.

A good part of the products from the company’s stores should come from a distribution center opened in November in Cajamar (SP), with an area of ​​7,000 square meters, which, according to the executive, should support the operation until March 2022. Other Distribution Centers will also be available in the group’s plans, as the company expands.

(Translated by LABS)

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