Cencosud expands in Argentina with $122.5m Makro and Basualdo acquisition

Cencosud S.A. has made a bold move to strengthen its presence in Argentina’s retail sector, marking its entry into the Cash & Carry market with the acquisition of Supermercados Mayoristas Makro S.A. and Roberto Basualdo S.A.. The deal, valued at $122.5 million, represents a significant expansion of the Chilean retail giant’s wholesale operations, reinforcing its long-term commitment to Argentina, where it has operated for over four decades.

The agreement was signed through Cencosud’s Argentine subsidiaries in a transaction with Unicenter S.A.. The acquisition will be fully financed with Cencosud’s own resources, though the final price may be adjusted based on net debt, working capital, and other contractual conditions. This expansion aligns with the company’s strategy to diversify its revenue streams and solidify its position as a dominant force in the Argentina retail sector.

Why is Cencosud Entering Argentina’s Cash & Carry Market?

The Cash & Carry market has become an attractive segment in Argentina due to its appeal among both business customers and bulk-buying consumers. This format provides competitive pricing and an extensive product range, making it a lucrative area for Cencosud’s expansion strategy. With the acquisition of Makro and Basualdo, Cencosud gains access to a well-established wholesale network, allowing it to compete more effectively in Argentina’s evolving retail landscape.

Both companies have operated in Argentina for more than 35 years, collectively managing 28 stores across 12 cities and 10 provinces, including key locations in Buenos Aires, Santa Fe, and Córdoba. Most of these stores are company-owned, providing Cencosud with a valuable real estate portfolio that enhances its long-term stability. Additionally, Makro has built a strong reputation for its private-label brand portfolio, which has fostered high levels of customer loyalty.

Cencosud’s CEO, Rodrigo Larraín, emphasized that the acquisition strengthens the company’s wholesale and supermarket operations, while also bringing synergy opportunities with its existing businesses in Argentina. He noted that Cencosud already operates in the Cash & Carry market in Brazil through its GIGA brand, making this expansion a natural progression in the company’s growth strategy.

How Does This Acquisition Fit Into Cencosud’s Growth Strategy?

Cencosud’s acquisition of Makro and Basualdo aligns with its broader 2025 investment plan, which includes a 16% increase in capital expenditures to $610 million. The company projects revenues of $17.95 billion and an Adjusted EBITDA of $1.87 billion for the year, backed by strong performances in Chile, the United States, Peru, and Argentina, along with improvements in Colombia and Brazil.

This expansion is part of Cencosud’s strategy to strengthen its retail ecosystem, focusing on store network expansion, digital transformation, and operational efficiencies. As part of its 2025 roadmap, Cencosud is also prioritizing the expansion of its supermarket chains, shopping centers, and e-commerce operations. The integration of Makro and Basualdo into its wholesale division is expected to drive profitability while enhancing its market presence.

During Cencosud’s annual investor presentation at Sky Costanera in Santiago, Chile, CEO Rodrigo Larraín reiterated that the company is well-positioned to capitalize on market trends and changing consumer behaviors. He emphasized that innovation, customer experience, and operational efficiency remain at the core of Cencosud’s expansion strategy.

What Does This Mean for Argentina’s Retail Market?

Cencosud’s entry into the Cash & Carry market is expected to intensify competition in Argentina’s retail sector, especially among major supermarket chains and wholesale operators. The integration of Makro and Basualdo into Cencosud’s retail ecosystem is likely to result in lower prices, a wider product range, and increased accessibility for both small businesses and individual consumers.

Industry analysts believe that Cencosud’s wholesale expansion could reshape Argentina’s supermarket industry, particularly as economic factors drive demand for cost-effective shopping options. Given the country’s inflationary pressures, the Cash & Carry model is well-positioned to attract budget-conscious shoppers looking for bulk discounts and direct-from-supplier pricing.

Cencosud’s presence in supermarkets, shopping centers, and home improvement stores also gives it a logistical advantage. The company’s ability to integrate supply chains across multiple retail formats could result in cost efficiencies and streamlined distribution, further strengthening its foothold in Argentina’s retail sector.

Cencosud’s Retail Leadership in Latin America

With this acquisition, Cencosud solidifies its status as one of the leading retail giants in Latin America, operating across eight countries with over 105,000 employees. The company’s vast retail network includes supermarkets, home improvement stores, department stores, and shopping centers, attracting more than 180 million annual visitors.

The addition of Makro and Basualdo further enhances Cencosud’s competitive position in the region, positioning it for sustained growth. As the company continues integrating these assets, industry experts will be closely monitoring the long-term impact on Argentina’s wholesale and supermarket landscape.

Cencosud’s expansion strategy underscores its commitment to adapting to shifting consumer trends while maintaining operational excellence. With a strong presence across Latin America, the company remains a dominant force in the region’s retail evolution.