Cencosud’s strategic shift: Why the retail giant is selling Bretas operations in Minas Gerais

In a decisive move reflecting its evolving business strategy, Cencosud S.A. has entered into an agreement to sell its Bretas operations in Minas Gerais, Brazil, for R$716 million (approximately US$123 million). The transaction, executed through Cencosud Brasil Comercial S.A., involves the transfer of 54 supermarket stores, eight service stations, a distribution center, and additional assets to Supermercados BH Comércio de Alimentos S.A. This sale, pending regulatory approval from Brazil’s Administrative Council for Economic Defense (CADE), is part of Cencosud’s broader business restructuring strategy in Brazil, focusing on enhancing profitability in more lucrative markets.

Why is Cencosud divesting its Bretas operations in Minas Gerais?

Cencosud’s decision to divest its Bretas operations is a calculated step in its long-term growth strategy. According to Rodrigo Larraín, CEO of Cencosud, this transaction will enable the company to “focus our efforts and resources on markets in Brazil where we see greater growth opportunities and profitability.” This shift aligns with the company’s goal of optimising its capital allocation while streamlining operations in highly competitive markets.

The sale reflects a deliberate pivot away from regions with limited growth potential. Despite Bretas’ strong presence in Minas Gerais, Cencosud aims to consolidate its market share in more dynamic regions such as Goiás, São Paulo, and Rio de Janeiro. The Brazilian retail market is undergoing significant transformation, driven by changing consumer habits and increasing competition from local and international retailers. For Cencosud, focusing on regions with higher economic activity allows for greater scalability and improved operational efficiency.

How will the transaction impact Cencosud’s operations in Brazil?

While divesting from Minas Gerais, Cencosud retains the Bretas brand and continues to operate 26 stores in the state of Goiás. This move supports the company’s asset divestment strategy, which aims to optimise its retail footprint without completely withdrawing from key markets. Cencosud will redirect resources to strengthen its operations through brands like GBarbosa, Mercantil Atacado, Perini, Prezunic, Spid, and GIGA Atacado, acquired in 2022, which continue to perform strongly in Brazil’s Northeast and Southeast regions.

Cencosud’s diversified portfolio includes more than 300 stores across Brazil, employing approximately 20,000 people. The company’s strategic focus on high-growth regions reflects its commitment to maintaining a competitive edge in the fast-evolving Brazilian retail landscape. By divesting underperforming assets, Cencosud can reinvest in areas with stronger consumer demand, better logistics infrastructure, and greater economic resilience.

What does this mean for Brazil’s competitive retail landscape?

The sale of Bretas operations to Supermercados BH marks a significant development in Brazil’s retail sector. Supermercados BH, one of the country’s fastest-growing supermarket chains, will expand its footprint in Minas Gerais, potentially intensifying competition in the region. This acquisition allows Supermercados BH to consolidate its market share while leveraging Bretas’ established customer base and operational infrastructure.

For Cencosud, the transaction underscores the company’s agility in navigating complex market conditions. The Brazilian retail market is marked by rapid shifts in consumer preferences, economic fluctuations, and regulatory challenges. By focusing on core markets with higher profitability, Cencosud is positioning itself to thrive amid these changes.

Cencosud’s broader growth strategy in Latin America

While streamlining its Brazilian operations, Cencosud is expanding aggressively in other Latin American markets. In January 2025, the company announced the acquisition of Supermercados Mayoristas Makro S.A. and Roberto Basualdo S.A. in Argentina for US$122.5 million, marking its entry into the Cash & Carry format. This acquisition strengthens Cencosud’s presence in Argentina, where it has operated for over 40 years. The move complements its wholesale operations in Brazil through GIGA, allowing for synergies across markets.

Cencosud’s growth is further supported by a robust investment plan for 2025. The company announced a 16% increase in capital expenditure, allocating US$610 million towards store expansions, shopping center renovations, digital transformation projects, and enhanced logistics capabilities. This investment is expected to drive US$17.95 billion in revenue and US$1.87 billion in adjusted EBITDA for the year, highlighting strong growth prospects in key markets such as Chile, the United States, Peru, and Argentina.

What’s next for Cencosud in Brazil and beyond?

Looking ahead, Cencosud’s focus will remain on enhancing operational efficiency, expanding its digital presence, and strengthening its brand portfolio across Latin America. The company’s business restructuring strategy in Brazil is just one part of a broader plan to adapt to changing market dynamics. Cencosud’s commitment to innovation, sustainability, and customer-centric growth positions it well for long-term success in the global retail arena.

The divestment of Bretas operations in Minas Gerais is a strategic decision aimed at optimising Cencosud’s resources and driving profitability. By focusing on high-growth regions and investing in its core markets, Cencosud is setting the stage for sustainable growth and continued leadership in the Latin American retail sector.