August 3, 2018 / 6:01 PM / 3 months ago

Brazilian retailer Via Varejo bets big on smaller stores

SAO PAULO, Aug 3 (Reuters) - Brazilian electronics retailer Via Varejo SA will open 20 new small-scale “kiosk” stores by the end of the year, an executive told Reuters on Friday, as the company moves away from bulkier brick-and-mortar operations amid an expansion drive.

Via Varejo, a unit of France’s Casino Guichard Perrachon SA , also plans expansions in its more traditional formats to some 400 towns throughout Brazil by year-end, up from 334 towns currently.

“We’re going to focus on places where we are not currently present. The strategy is about increasing capillarity,” Chief Operating Officer Paulo Naliato said in an interview.

Kiosk stores, a new Via Varejo format no more than 24 square meters (258 square feet) in area, will sell in-house brands as well as electronics and appliances from third-party vendors. The stores will be located in a variety of locations, including malls and grocery stores owned by GPA, also a Casino unit.

The move reflects a general trend in Brazilian retail away from large stores and toward smaller, neighborhood formats that offer more convenience in a country plagued by poor infrastructure and tangled logistics. The capital expenditures saved from the trend often go into boosting e-commerce units.

In the interview, Naliato said the entry of the kiosk format into new communities would speed up online sales by allowing clients to pick up a purchase in a nearby store. He added that the small size of the kiosk would allow Via Varejo to quickly scuttle or move stores to a different location should a location prove unprofitable.

“Every time we enter a new town where we’re not already present,” he said, “the physical presence accelerates online demand.”

Via Varejo has been on sale since 2016. Among the companies that have taken a look is online retail giant Amazon.com Inc , Reuters reported in March. (Reporting by Gabriela Mello; Writing by Gram Slattery; editing by Jonathan Oatis)

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