Shortages of Brazilian Land Supply and Labour Stifles Supermarket Expansion Plans
An article in the Estadão newspaper has pointed to a number of major Brazilian supermarket chains stating difficulties in obtaining viable plots of land amongst other production factors, including the low supply of labour, as a major obstacle to their development plans.
Antonio José Monte from the ABC group (which has 29 stores in the São Paulo region), for example, stated that the company’s intention was to inaugurate 5 further supermarkets in 2011, but only 2 will actually happen – indicating the problems of executing investments as the main reason.
In the same article, André Simon Cywinski – partner of the Tecnovarejo consultancy – stated that the price per m² on plots of land of over 10,000m² has tripled between 2007 and 2010 and Lopes Supermarkets believes that the values of plots the company has been looking at have increased by up to 50 percent in only the last 6 months. The Savegnago group based in São Paulo (with revenues of almost R$ 1 billion in 2010) also believe that the rapid prices rises have been prompted in the last year – attributing the boom in housing sector within the state’s interior as the principle factor.
