- Walmart says it is ready to compete with Oxxo and 7-Eleven with its next line of convenience stores.
- Currently, with more than 50 percent, Oxxo dominates the convenience store market, having more than 17,400 units in Mexico.
Walmart announced that it will enter the convenience store business in Mexico, a market that is now dominated by Oxxo and 7-Eleven.
According to information that was leaked in different media, the self-service chain announced that it will begin to install gas stations in some of the parking lots of its supermarkets, a situation that will help it to set up its own convenience stores.
Although it is true that Walmart already has a presence in different formats of self-service stores, such as Bodega Aurrerá, Sam’s Club or Walmart Express, what the company is now proposing is to enter. compete against two true giants, Oxxo and 7-Eleven, which are the ones that currently have a great presence.
Of course, it is a risky move, but one that some analysts classify as good, despite the fact that the expectation regarding competition with Oxxo does not make a difference.
Oxxo is currently the largest in the market with just over 50 percent of convenience stores, followed by Six, 7-Eleven and Extra.
Until last quarter, Oxxo had more than 17,400 units in Mexico, while 7-Eleven has about 1,800 stores in various states of the country.
However, this does not mean that, in that sense, Walmart does not have the strengths to be an important competitor for the brands that dominate the market. At least, that’s what some analysts glimpse with this store decision.
Specialists warn that, with this strategy, Walmart will be able to offer added value to its customers, in addition to giving them the opportunity to build loyalty with the brands, this because the store has among its qualities the granting of various reward services to consumers.
“There is a strong possibility that Walmart will eventually bring the format to locations not necessarily adjacent to gas stations. Although he has emphasized that, for now, they go only next to service stations, the growth potential that Oxxo, 7-Eleven, Extra and the other already established chains have already achieved make it a very appetizing niche as so Walmart ignores it ”, is what an analyst points out regarding this Walmart decision, given that the company has greater experience in topics such as the know-how of small formats, as well as in inventory management.
For this new market that Walmart will enter, the brand has partnered with Gazpro for the construction of the gas stations that will house the company’s convenience stores. Through a statement, the self-service giant explained the following:
“Gazpro will be responsible for the investment, design, construction, development and operation of the gasoline service stations. Walmex will make spaces available in the parking lots of certain stores or clubs, under a leasing scheme ”.
Since 2018, the process began so that Walmart could diversify towards the sale of fuels. At that time, the company indicated that it would begin such operations in Tabasco, Nuevo León, Veracruz and the State of Mexico.
That said, everything indicates that the brand has everything ready to join a market that already has an owner, but that, with the great potential of Walmart stores, competition is likely to be strong and even beneficial, since it will be able to offer practically any kind of services.
“(Walmart) has the infrastructure, it has the points of sale and a captive market and, when they are in the parking lot, it will be very convenient for customers to be able to load gasoline right there. The interesting thing is going to be to see if this model is replicated in countries in Central America where the sale of foreign brand gasoline is also allowed. The opportunity could be seen, ”says Julián Fernández, chief analyst at Leag Academy.
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