More than just convenience stores in Mexico

Franchise convenience stores have come a long way in Mexico, proliferating over the years to the extent that there are now thousands of them across the country—from the largest cities to smallest towns.

People living in urban areas in Mexico tend do their main shopping at the supermarket—the principal chains are Walmart, Soriana, Mega, and Chedraui.

The local tienditas, which sell everything from pre-packaged cupcakes to soap, eggs and other staples, became the secondary source of groceries—things that people unexpectedly ran out of or forgot to pick up at the supermarket.

The tienditas clearly can’t compete with the economies of scale that the supermarket chains employ, and therefore things they sell are generally more expensive, although their location in the heart of residential neighborhoods still gives them an advantage for smaller purchases.

Most of the tienditas are family-run businesses, and the shopkeepers end up working long hours to keep the store well-stocked and make a profit. Some will deliver to your home—more precisely, you can phone them and they send a boy ’round on a bike.

Into this neighborhood terrain came the franchised convenience stores which began to appear in earnest during the 1990s.  The biggest convenience store chain is Oxxo with more than 13,000 outlets; followed by 7-Eleven, Extra, and Circle K. These stores aren’t cheaper than the tienditas—some products are more expensive—but many offer 24-hour service, serve fresh coffee, and tend to be cleaner and brighter than most of the local stores.  Customers can also use these convenience stores to pay utility bills, deposit and withdraw money from certain local banks, transfer money to third parties, and buy cell phone airtime.

When you consider the hundreds of millions of dollars that go into expansion and marketing of these franchise chains, what’s perhaps astounding is that the tienditashave survived at all. And yet, they remain part of the Mexican retail landscape.

Some of the more astute tiendita owners who have been challenged by an Oxxo or 7-Eleven on their street have continued to attract customers through product diversification.  The franchised stores’ stock is mostly limited to pre-packaged products which the franchisees have little control over.  By contrast, local shop-keepers have the option to diversify and some have done so by introducing products that the franchised stores don’t offer, including fresh fruit and vegetables, freshly squeezed fruit juices served during morning hours, freshly baked sweet and savory breads, and even meats like fresh poultry and charcuterie.  By offering things that the convenience stores can’t by design, the local tienditas have given local customers a reason to visit their stores — where they may also purchase much of what the convenience store offers, with the exception of bill-paying and financial services.

One aspect that is often overlooked in regard to the tienditas’ commercial ethos is that they’re not really run as profit-centers, but rather intended as a means to sustain the family that runs the store. Their overheads are low, there are no ‘salaries’ per se, and they run the shop on a subsistence basis.  This perhaps gives an insight into what keeps the old-world tienditas going amidst a torrent of contemporary marketing.

The number of tienditas has, undoubtedly, declined over the last decade and will probably continue to do so in the years ahead. Younger generations growing up tend to have different ideas about commerce and thus less likely to follow in the footsteps of their parents and grandparents.

Source: Mexperience

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