The term atacarejo refers to a new business model that has been gaining considerable ground in the market. It combines features of the two best-known forms of commerce: wholesale and retail.
The changes that traditional sales models have undergone over the past few decades due to modern consumer behavior, along with many other political and socioeconomic factors, have directly contributed to the rise of the atacarejo in Brazil.
Today, it is the fastest-growing sector in our country. With more than 500 stores across Brazil, revenue exceeding R$80 billion, and more than 75,000 direct jobs created, the atacarejo is a trend that benefits both consumers and business owners. Keep reading to learn more about it!
Where does the concept come from and how does it work?
In 1964, after opening his first Cash and Carry store in the city of Mulheim, Germany, Professor Otto Beisheim gave rise to the concept of strategically combining features of the two most traditional market models in history, which would later come to be known as the atacarejo.
The original idea was quite simple: give consumers the freedom to pick products off the shelf and take them home without the need for a salesperson, thereby guaranteeing prices lower than those charged by traditional stores.
The atacarejo focuses on low prices, a typical feature of wholesale, but offers services similar to those of retail. In this business model, the low prices are offset by high sales volume and by bringing the distribution point and the point of sale together in the same space.
What are the defining features of the wholesale and retail business models?
The two defining features of wholesale are selling products in large quantities and offering prices lower than the regular market, right?
And one is tied to the other. In other words, to take advantage of the discounts, you need to buy a large volume of goods. That’s why most customers in this segment are typically business owners, store owners, and merchants.
Retail, on the other hand, is known for selling directly to the end consumer. The large number of small neighborhood markets found in every region of the country shows a strong preference for this format among the target audience.
Unlike wholesale, the defining feature of retail purchases is that they are made in smaller volumes and, as a result, there is a significant price difference compared to wholesale.
How does the atacarejo differ from traditional supermarkets?
Now that your memory of how wholesale and retail businesses work has been refreshed, we’ll show you what makes the atacarejo a unique model.
Low prices
As mentioned, the atacarejo is strongly characterized by low prices (wholesale), but with a leaner structure (retail), which allows a number of costs to be reduced, such as staff to assist with the purchasing process.
High sales volume
What sustains low prices in this business model is high sales volume, with profit potential focused on the average ticket per purchase.
Smaller assortment
Because they focus on quantity, atacarejo stores negotiate in large lots, which helps lower prices but ends up limiting product variety somewhat.
What strategies does it use?
With sales this strong, it’s easy to understand the main reason why the format remains at the center of the expansion strategies of Brazil’s largest retail chains.
Carrefour, for example, bought Atacadão in 2007 for US$1.1 billion, and the Maxxi chain now belongs to Walmart. Likewise, Pão de Açúcar owns Assaí and has invested more than R$1 billion in recent years to expand the chain’s potential.
What we mean is that, given external factors such as tight budgets due to the economic crisis and high inflation, the atacarejo format is increasingly proving to be the alternative of the future.
The trend is for the atacarejo to keep gaining momentum, as more and more stores that still follow the hypermarket format are migrating to this innovative model. But it’s still too early to say anything for certain.
What are the advantages of this model for businesses and consumers?
On one hand, end consumers are drawn by the low prices and the savings they can enjoy on their purchases. On the other, businesses (when there’s a well-developed strategy in place) can count on a consistent, functional, highly profitable model that promotes itself.
As mentioned several times throughout this article, low prices are the main driver of the sector’s growth in Brazil, especially in an unprecedented economic and political scenario like the one we are currently experiencing.
In times of high unemployment and changes that create a general sense of financial instability among the population, such as the Pension Reform and the new government, saving money isn’t a mere whim but a priority for Brazilian families, especially those in socioeconomic classes A and B.
However, it’s essential to understand that even with attractive prices, there are issues that atacarejo managers need to address, such as disorganization and a lack of planning to serve the target audience according to their needs.
According to a survey conducted by Quorum Brasil, aspects such as lighting, cleanliness, and poor-quality fruit are on the list of complaints from the consumer’s point of view.
Throughout this article, we’ve presented a range of information that strongly explains the growth of atacarejos. There are several political, socioeconomic, and behavioral factors, in terms of changes in people’s consumer profiles, that have directly and indirectly contributed to the growth of the atacarejo business format.
It’s a market model that delivers advantages to both end customers and store owners, making it profitable, functional, and self-sustaining.
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