Brazilian Groceries: The Price-Quality Battleground
Despite its less discretionary profile within the retail universe, a decline in Brazil’s total real disposable income could be a headwind for retail food sales. People continue to look for better value propositions and prices when shopping for groceries, and the C&C segment could continue to gain share of wallet and penetration within the retail food market.
According to the Brazilian Association of Wholesalers and Cash & Carry (Abaas), there are currently ~1,400 C&C stores. In this highly competitive segment, the first mover has the advantage. @Marcella Recchia and team estimate there is room to open a considerable number of new C&C stores in the country over the next five years.
We calculate the implied number of new C&C stores (at a mature level) based on the market size projected by Euromonitor. We review calculations suggesting potential ahead for C&C in the coming years and examine the limitations of our analyses using store and sales area penetration methodologies.
With rising crime, increased scrutiny is falling on police response. Given recent impacts from heavily publicized events, staffing challenges at police departments, and increased public safety spending via state/municipal/federal sources, technology-enabled solutions have strong potential to improve public safety.
Restaurants are looking to maximise profits by running operationally efficient kitchens and generating new revenue streams. Delivery-enabled profit maximising techniques and asset sweating struggle to cohabit alongside traditional kitchen operations.
Inflation is expected to be a prominent theme for the group this year, as Utilities pass most costs through to customers, offering an inflationary hedge to investors. Monitoring customer bill inflation is vital in the current backdrop. Large-cap Utilities with multi-state jurisdictions and with exposure to commodities face less project risk than smaller regional peers.
