Mexico's Soriana eyes U.S. market
MEXICO CITY (Reuters) - Mexican retailer Soriana will focus on consolidating locally for the next few years but does not rule out acquisitions or expanding into the United States to reach out to the booming Hispanic market there.
Soriana (SORIANAB.MX), Mexico's No. 2 retailer, sees earnings before interest, tax, depreciation and amortization (EBITDA) up 17 percent this year, Chief Executive Ricardo Martin Bringas told Reuters Latin American Investment Summit on Thursday.
"We feel there is a bigger opportunity in North America," he said. "We would seek to enter different market niches. The eye would be on the Hispanic market, although there is an interesting Anglo market that we could enter with different formats."
Martin Bringas said any expansion into the U.S. market would likely happen after 2010.
Same-store sales in Mexico -- which measure revenue at stores open for more than a year and are a key performance indicator for retailers -- could rise 3.5 percent this year while total sales are seen up 15 percent in 2007, he added.
Soriana stands a distant second place from leader Wal-Mart de Mexico (WALMEXV.MX), which has nearly 900 stores across the country, but it has a stronghold in the northern states where its rival has a weaker presence.
Soriana does not rule out acquisitions in the future to help it reach its goal of 400 stores by 2010, Martin Bringas said. The retailer ended last year with 234 stores.
The company plans to launch a new store format, Mercado Soriana Super, by the end of the year, with an eye on building in small cities with populations ranging from 30,000 to 50,000 in a bid to access a niche that Walmex is unlikely to enter.
Soriana reiterated its intention to offer banking services but a decision on whether it applies for a banking license or enter a joint venture with an existing financial institution will not be made until April, Martin Bringas said.
Retail-run banks have become attractive to investors in Mexico since Elektra (ELEKTRA.MX), which sells everything from stereos to fridges, launched Banco Azteca in 2002.
Walmex is launching its own in-store banks later this year.
Soriana shares ended down 1.7 percent at 32.57 pesos on Thursday.