I read an interesting article recently in the WSJ about Wal-Mart’s decision to adopt bodega-type stores in Mexico to better compete for low-income consumers. Since that piece is gated, try checking out this article, which gives a lot of background information. Apparently, Wal-Mart has experimented with a 3-pronged approach in Mexico and hopes to re-create the experiment in other emerging markets. Briefly, the three prongs are:
1. The creation of a “compact hypermarket” called Bodega Aurrera, carrying a mix of “roughly 60% food and 40% non-food items, measuring about 42,000 square feet.” I don’t know anything about retailing, but Aurrera? Who came up with that? It sounds horrible to me, but what do I know?
2. A neighborhood supermarket called Mi Bodega that is smaller and focuses more on food items. Now this name I like.
3. Yikes, back to the Aurrera name. The third creation is the Bodega Aurrera Express and it is a “soft discount store.” Hmm, what does the adjective soft mean here? According to the article, it will have “an 80% food vs 20% non-food mi, focusing heavily on price and convenience as the primary trip drivers.”
Wal-Mart is hoping to provide a bridge between formal and informal markets. One of the ways they are doing this is by “offering smaller packages or the option of buying one-packs (vs bundles) for things that other retailers wouldn’t bother doing.” Check out the pet food sold by the meal and toilet paper sold by the roll:
That is smart business!
Funny Sidenote: The toilet paper innovation reminded me of Jim Gaffigan’s riff on Hot Pockets and the impossibility of buying toilet paper in a dignified way (given that they come 18 rolls per case). Here’s the piece if your are looking for a laugh: