Oxxos in Europe

After building Oxxos on every corner of Mexico, Femsa is turning to the wealthiest region in the world for its future. Last week, Oxxo’s parent company, Femsa, announced a $1.2B cash takeover of Swiss convenience store chain Valora. The deal includes 2,724 points of sale across Europe under 15 different brand names.

Throughout the years, Femsa has been building a convenience store empire in Mexico, surpassing some of the most iconic chains and reaching a high of 4 stores opened daily in 2018. The company’s rate of openings started slowing down in 2019. In 2020, the company’s rate (understandably, due to the pandemic) slowed down to 0.6 store openings per day. However, since 2021, its build rate hasn’t recovered, opening about two stores per day. That rate is about what it was in 2007.

Oxxo’s international expansion officially began in 2009, when Femsa opened 5 locations in Bogota, Colombia. The growth wasn’t nearly as aggressive as in Mexico; instead, the company took its time experimenting with those stores to understand the market and the Colombian customer. Once it felt more comfortable, the company accelerated its openings in South America, and it now owns 300+ stores across Colombia, Peru, Chile, and Brazil.

Now it’s time for an exciting and possibly very lucrative new chapter for Femsa. The average GDP per capita in the European Union is about $38K. If we compare that to Mexico’s $10K, the European segment represents a very attractive opportunity for growth. The deal also includes pretzel stores, coffee shops, and other concepts that are unchartered territory for Femsa. A spokesperson said this might be the first of a series of acquisitions to enter markets outside Latin America.

It’s unclear whether Femsa plans to keep the brand names and concepts it just acquired, but an Oxxo right next to the Eiffel Tower just became a not-so-crazy possibility.