Industry Research Report on the Retail in Chile.

Value Chain outline

The retail value chain in Chile, similar to global retail, involves a series of activities that bring products from manufacturers to the final consumer. Based on the available information, the primary activities in the retail value chain can be broadly outlined as: procurement/sourcing, logistics/distribution, store operations (physical and online), marketing and sales, and post-sales service. These activities are supported by secondary functions such as infrastructure, human resources management, technology development, and procurement (of indirect goods and services).

In the Chilean context, this value chain is characterized by the significant presence of large holding companies that operate across multiple retail segments, integrating several steps of the value chain. The increasing importance of e-commerce is also transforming the traditional model, requiring retailers to invest in technology and logistics to expand their online channels and integrate physical and online operations (omnichannel strategy). The supply chain, a crucial part of the value chain, has faced challenges requiring greater control, intelligence, and resilience.

• Identification and description of each step in the value chain

The primary steps in the retail value chain, adapted to the Chilean market, include:

• Procurement and Sourcing: This involves identifying suppliers, negotiating prices, purchasing goods, and managing relationships with manufacturers and wholesalers. For large retailers in Chile, this can involve both national and international sourcing, with some large international companies using production plants in Chile to serve other Latin American markets.
• Inbound Logistics: Activities related to receiving, storing, and managing raw materials and finished goods from suppliers to distribution centers or stores. This includes warehouse management and internal transportation.
• Operations/Production: This step involves the processes within the retail company to prepare goods for sale. In the context of retail, this primarily refers to managing inventory, stocking shelves, and preparing products for display or online fulfillment. For some retailers, particularly those in food, it might also involve some level of processing or packaging.
• Outbound Logistics: This covers the activities of distributing finished goods from distribution centers to retail stores or directly to consumers in the case of e-commerce. Efficient logistics and distribution are critical for retailers in Chile, especially given the country's geography and the increasing demand for faster delivery.
• Marketing and Sales: This encompasses activities aimed at promoting products, attracting customers, and completing transactions. This includes advertising, pricing, in-store displays, online merchandising, and customer service during the purchase process. Loyalty programs are also a significant part of marketing and sales strategies in Chile.

• Services: These are activities that enhance the product's value or the customer's experience, such as installation, repair, customer support, and post-sale service. Financial services, such as credit cards offered by major department stores and supermarkets, are a crucial additional service provided by many large Chilean retailers.

• Identification and description of segments for each step of the value chain.

• List of types of players in each segment
• Detailed description of the main activities within each segment.
• List examples of key players with detailed profiles.

While the value chain steps are present across the entire retail industry, specific activities and segments are more pronounced within different retail categories. The main segments in the Chilean retail industry include Supermarkets, Department Stores, Home Improvement, and Pharmacies.

Segment: Supermarkets

• Description: Supermarkets are a vital part of daily life in Chile, offering a wide range of products including fresh food, groceries, personal care items, and cleaning products. This segment is highly concentrated, with a few large chains dominating the market. E-commerce has gained relevance, with chains offering online shopping and home delivery.
• Types of Players: Large supermarket chains (hypermarkets and supermarkets), smaller local grocery stores, wholesale supermarkets.
• Main Activities: Procurement of food and non-food products, management of extensive logistics and distribution networks, inventory management, in-store operations (stocking, merchandising, checkout), e-commerce operations (website/app management, online order fulfillment, last-mile delivery), marketing and promotions, and sometimes offering financial services.
• Examples of Key Players:
  • Walmart Chile: A leading player with formats like Lider, Express de Lider, SuperBodega aCuenta, and Central Mayorista. Known for its extensive store network and logistics investments.
  • Cencosud (Jumbo, Santa Isabel): Operates hypermarkets and supermarkets, with Jumbo known for a wide variety including imported products.
  • SMU (Unimarc, Mayorista 10, Alvi, Super 10): Has extensive geographical coverage, particularly strong in regions. Operates different formats including wholesale.
  • Falabella (Tottus): A significant player in the supermarket segment as part of the larger Falabella group.

Segment: Department Stores

• Description: Department stores offer a complete shopping experience with a variety of products like fashion, accessories, electronics, and home goods. They are typically located in urban areas and shopping malls. They are known for promotions and loyalty programs, and often provide financial services. This segment is also highly concentrated.
• Types of Players: Large department store chains, smaller multi-brand stores (multitiendas) targeting specific income segments.
• Main Activities: Procurement of diverse product categories, management of large retail spaces, visual merchandising, sales and customer service, management of loyalty programs and credit cards, and increasingly, developing online sales channels and integrating them with physical stores.
• Examples of Key Players:
  • Falabella: One of the largest retail companies in Latin America with a strong department store presence in Chile.
  • Cencosud (Paris): Operates the Paris department store chain, a major competitor in this segment.
  • Ripley: A significant player in department stores, also with financial services and real estate businesses.
  • AD Retail (Abcdin): Operates department stores, recently merged with Empresas La Polar.
  • Empresas Hites: Another player in the department store segment, often targeting middle to low-income households.
  • Empresas La Polar (abc): Merged with Abcdin, operating under the "abc" brand.

Segment: Home Improvement

• Description: These stores specialize in products for building, renovating, and decorating homes. The segment includes large chains and smaller, specialized hardware stores. The demand in this segment has been influenced by factors like teleworking and government aid.
• Types of Players: Large home improvement chains, specialized hardware stores (ferreterías).
• Main Activities: Procurement of construction materials, tools, and home goods, managing large retail spaces and warehouses, providing customer advice and services related to home projects, and developing online sales channels. Some players also cater to B2B segments like contractors and small construction companies.
• Examples of Key Players:
  • Falabella (Sodimac Homecenter, Sodimac Constructor, Homy, Imperial): A leading player in the home improvement and construction retail sector. Operates different formats targeting retail customers and professionals.
  • Cencosud (Easy): A significant competitor in the home improvement segment.
  • SMU (Construmart): Part of the SMU group, also present in the home improvement market.
  • Chilemat: An association of hardware stores.

Segment: Pharmacies

• Description: Pharmacies in Chile sell a wide range of products including medications, health, beauty, and personal care items. The market is characterized by the strong presence of a few large chains, although independent pharmacies also hold a significant number of locations.
• Types of Players: Large pharmacy chains, independent pharmacies.
• Main Activities: Procurement of pharmaceuticals and related products, inventory management of controlled substances and diverse product ranges, dispensing medications, providing health advice, and selling personal care and beauty products. Increasingly, some offer online services.

• Examples of Key Players:

  • Cruz Verde: A major pharmacy chain in Chile, part of FEMSA's Health Division.
  • Salcobrand: Another prominent pharmacy chain, part of Empresas SB.
  • Farmacias Ahumada (FASA): One of the historical major pharmacy chains.
  • Dr. Simi: A chain that has seen an increase in its participation in recent years.

• Show estimates of volumes and sizes of each step in the value chain.

Providing precise volume and size estimates for each step of the value chain across the entire Chilean retail industry is challenging with the available data, as reporting often focuses on sales revenue by company or by broad segment. However, we can infer some size and volume aspects based on the information about key players and market segments.

• Overall Retail Market Size: While specific total retail market size for 2024-2025 is not explicitly stated for all segments combined, the retail food industry alone had total sales of approximately $29.5 billion in 2022. This highlights the significant size of just one segment. The global retail market was projected to reach $31983.19 billion in 2024 and grow to $34867.41 billion in 2025. While not specific to Chile, this indicates the large scale of the industry globally.
• Supermarkets: This is the most important segment in terms of sales. In 2022, supermarkets and grocery stores accounted for around 55.5% of the retail food market share. Key players' revenue in 2024 provide an indication of the volume of goods flowing through this segment:
  • Cencosud (which includes supermarkets and other formats) reported consolidated revenues of approximately USD 17.5 billion in 2024. Their supermarket segment (Jumbo and Santa Isabel) had a significant market share of the retail value.
  • Walmart Chile is the largest supermarket chain by revenue, with approximately 20% of the total retail value in 2022. They operate around 480 stores.
  • SMU (Unimarc) had a market share of 11.1% of retail value in 2022 and reported full-year 2024 revenue of approximately USD 3.0 billion. They operate 285 Unimarc stores and other formats.
  • Tottus (Falabella) had 4.1% of the retail value in 2022. Falabella's consolidated revenue (across multiple segments) was approximately $12.60 billion USD for the trailing twelve months ending in 2024.
• Department Stores: This is another important segment by sales. While specific recent market share percentages across all players for 2024 are not available, historical data shows high concentration among Falabella, Paris (Cencosud), and Ripley.
  • Falabella's consolidated revenue includes its department stores.
  • Cencosud's consolidated revenue includes Paris.
  • Ripley reported a trailing 12-month revenue of $2.21 billion USD as of December 31, 2024.
  • Empresas La Polar (abc) reported trailing 12-month revenue of $536 million USD as of December 31, 2024, for the combined entity.
• Home Improvement: This segment is dominated by Sodimac (Falabella) and Easy (Cencosud). Sodimac has historically held the largest market share. The revenues of these segments are included within the consolidated revenues of their parent companies, Falabella and Cencosud. Demand in this segment saw significant growth during and after the pandemic.
• Pharmacies: The pharmacy market in Chile was expected to generate $2.446 million USD in revenue in 2024. The market is concentrated, with Cruz Verde, Salcobrand, and Farmacias Ahumada historically holding a large majority of the market share, though independent pharmacies and Dr. Simi have increased their presence.
  • Salcobrand's online revenue was reported as $115.8 million USD in 2024. La Polar's online revenue (which includes some products also found in department stores) was $40.7 million USD in 2024.

Value Chain Summary Table

Value Chain Step	Main Activities	Segments Involved	Types of Players	Examples of Main Players	Estimates of Volumes/Sizes (where available)
Procurement and Sourcing	Identifying suppliers, negotiating contracts, purchasing goods, supplier management	All Retail Segments	Manufacturers, Wholesalers, Importers	(Companies supplying goods to the retailers listed below)	Significant volumes flow through major retailers; precise total procurement volume not available.
Inbound Logistics	Receiving goods, warehousing, internal transport	All Retail Segments	Retailers (managing own logistics), Logistics Providers	Walmart Chile (managing distribution centers), Cencosud, Falabella, SMU	Linked to the volume of goods procured and distributed by retailers.
Operations/Production	Inventory management, stocking, product preparation for sale	All Retail Segments	Retailers (in-store and online operations)	All major retailers (managing their physical stores and e-commerce fulfillment)	Reflected in store count and online sales volume. Walmart Chile: ~480 stores. SMU: 285+ stores.
Outbound Logistics	Distribution to stores, delivery to consumers	All Retail Segments	Retailers (managing own delivery fleet), 3PLs (Third-Party Logistics)	Walmart Chile (expanding distribution centers), Cencosud, Falabella, SMU (enhancing online delivery)	Growing importance with e-commerce; specific volumes for distribution not readily available.
Marketing and Sales	Product promotion, pricing, customer attraction, transaction processing	All Retail Segments	Retailers (marketing departments, sales teams), Advertising Agencies	All major retailers (running campaigns, managing sales channels)	Reflected in sales revenue and market share figures (see below). Loyalty market expected to reach $383.2M in 2025.
Services	Post-sale support, returns, financial services, installation, advice	All Retail Segments (Financial Services in Dept. Stores & Supermarkets)	Retailers (customer service teams), Financial Institutions, Service Providers	Falabella (Banco Falabella), Cencosud, Ripley (Banco Ripley), Major Supermarkets (offering credit cards)	Linked to sales volume and customer interactions; financial service volume tied to card issuance and transactions.

Examples of Main Players

• Cencosud S.A.: A dominant multinational retail conglomerate in Chile and South America. Operates across supermarkets (Jumbo, Santa Isabel), department stores (Paris), and home improvement (Easy). Cencosud has been focusing on digital transformation and creating an integrated retail ecosystem. In 2024, they reported consolidated revenues of approximately USD 17.5 billion.
• Falabella S.A.: Another major South American retailer with a significant presence in Chile. Their portfolio includes department stores (Falabella), home improvement (Sodimac), supermarkets (Tottus), and financial services (Banco Falabella). Falabella is investing heavily in its omnichannel strategy and optimizing its store footprint. Their consolidated revenue for the trailing twelve months ending in 2024 was around $12.60 billion USD.
• Walmart Chile: The Chilean subsidiary of the global retail giant, leading the supermarket sector. Operates various formats like Lider, Express de Lider, SuperBodega aCuenta, and Central Mayorista. Walmart Chile has announced significant investments to open new stores and expand its logistics capabilities. They were the largest supermarket chain by revenue in 2022.
• SMU S.A.: A prominent Chilean supermarket company with a wide reach across all regions of the country. Operates under brands such as Unimarc, Mayorista 10, Alvi, and Super 10. SMU is focusing on expanding its store network and improving operational efficiency. They reported full-year 2024 revenue of approximately USD 3.0 billion.
• Sodimac S.A.: A subsidiary of Falabella, specializing in home improvement and construction retail. Operates formats like Sodimac Homecenter and Sodimac Constructor. Sodimac is a leader in its segment in Chile. Their revenue is consolidated under Falabella.
• Cruz Verde: One of the major pharmacy chains in Chile, part of the Health Division of FEMSA. Competes strongly in the pharmaceutical retail market.
• Salcobrand: Another key player in the Chilean pharmacy market, part of Empresas SB. Along with Cruz Verde and Farmacias Ahumada, they constitute the largest chains. Their online sales were reported at $115.8 million USD in 2024.

Volumes and Sizes

Estimates of volumes and sizes in the Chilean retail industry are often presented in terms of revenue, market share, and number of stores.

• The Chilean retail food industry had total sales of approximately $29.5 billion in 2022.
• Supermarkets and grocery stores accounted for around 55.5% of the retail food market share in 2022.
• Walmart Chile is the largest supermarket chain by revenue, with approximately 20% of the total retail value in 2022. They operate around 480 stores.
• Cencosud's supermarket segment (Jumbo and Santa Isabel) held a significant market share of the retail value. Cencosud's consolidated revenue across all formats was approximately USD 17.5 billion in 2024.
• SMU (Unimarc) had a market share of 11.1% of the retail value in 2022. SMU reported full-year 2024 revenue of approximately USD 3.0 billion. They operate over 285 stores under the Unimarc brand and other formats.
• Tottus (Falabella) had 4.1% of the retail value in 2022.
• In the pharmacy market, the expected revenue for 2024 was $2.446 million USD. The major chains (Cruz Verde, Salcobrand, Ahumada) historically hold a large majority of the market share. Independent pharmacies have increased their number of locations, surpassing the major chains in store count in 2021.

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