Multivarejo is the new brand for the retail business model for GPA food, which operates in the hyper- and supermarket segments under the Extra banner; in supermarkets and food delivery, under the Pão de Açúcar banner; the Minimercado Extra proximity stores; and fuel stations and drugstores.

In 2013, to gain market share, GPA adopted a strategy focused on increasing competitiveness by reducing prices, supported by improving efficiency and reducing expenses, with the objective of increasing customer flows. This positioning had an impact principally in the businesses that form part of Multivarejo.

Initiated in the 2nd quarter of the year, this directive had a plan to rationalize expenses, where the principal initiatives were: store operating efficiency, back-office optimization and synergies, and reduced corporate expenses. The gains were passed along to consumers through lower prices. One of the differences of this strategy is that, for the first time, price competiveness had broader scope.

This positioning had a positive impact on all the formats, if especially the hypermarket, which saw sales growth that beat inflation. The performance in non-foods over the course of the year was positive, with more visible results at year-end, complemented by positive performance in foods, highlighted by perishables (fruits, legumes, vegetables and seafood), which enjoyed double-digit growth during the year.

In line with this strategy, promotional activities were also intensified, with an enhanced presence in the media and in the area of influence of the stores. Thus, the results in terms of competitiveness were accelerated, with an increase in the volume of sales (7.5% over 2012); a recovery in the flow of customers in the stores, and gains in market share, where the gain in the last period was 100 basis points.

The number of stores also increased at the same clip, with 70 inaugurations in Multivarejo, including 59 new Minimercado Extra stores, in addition to 5 for Pão de Açúcar, and 6 for Extra Super, adding aggregate sales floors of 27,500 square meters.

Pão de Açúcar

Characterized by being a model known for innovation and strengthened by its resilience, Pão de Açúcar in 2013 recorded the best performance among the Multivarejo banners, with uniform growth throughout Brazil and an increase of 10.7% in sales in relation to 2012.

To increase the penetration of the format and thus secure its expansion, a process of relaxing the parameters for store size was initiated during the year, exploring more compact units that afford the banner profitable and agile expansion.

During the year, the chain opened 5 stores, with expansion in new marketplaces, and strengthened its positioning in cities that are growing.

Extra

In addition to the successful strategy of more competitive pricing, which permitted an increase of 5.5% in the volume of sales over 2012, the stores under the Extra banner also achieved robust gains with the intensification of the synergies and integration with the virtual world.

During the year, pilot services were launched in partnership with e-commerce operations, such as the "Store Take-Out" and "Electronic Catalog," permitting hypermarkets to make use of the benefits of the multi-channel approach, increasing customer flow and enhancing the supply of in-store services.

Proximity Stores

As one of GPA’s focal points for expansion going forward, proximity stores, which currently operate under the Minimercado Extra banner, maintained their accelerated pace of inaugurations, opening 59 stores, closing the year with 164 units, representing growth of 87.7% over 2012.

In addition to expanding their actuation in cities where they were already present (such as Campinas, Santos, São Paulo state’s ABC region and Osasco), the model also entered into new marketplaces (Sorocaba, Guarulhos and Praia Grande), reinforcing its presence in the State of São Paulo.

Together with aggressive growth, the challenge to the Minimercado in 2013 was to guarantee logistical and operational efficiency – key characteristics in supporting the growth of the business and guaranteeing the success of the model. Along these lines, the actions undertaken during the year were oriented toward investments in:

> training the workforce;
> information systems;
> infrastructure and logistics to undergird the strong expansion seen in 2013 and the growth projected going forward.

Drugstores and Gas Stations

With 157 stores in operation, drugstores were restructured in 2013, culminating in the remodeling of 7 stores. The changes were focused on expanding sales floors, which went from 30/40 square meters to stores with 100 m2, and emphasizing skin products and cosmetics, which can contribute higher margins to the business. As a result of this new positioning, all the drugstores remodeled during the year have already enjoyed gains in profitability.

In fuel stations, the Group closed the year with 85 units, maintaining the elements that set this segment apart: trustworthy brands, better deals with the distributors, the best prices in the region, transference of the low-price image to the store, and increased customer flow.

¹The Multivarejo brand was launched in 2014 and is therefore a subsequent event presented in this report.