For Chedraui, the Big Business is Now in the United States
Chedraui's US revenues now surpass Mexico's, tripling its stores since 2021 to become California's largest.
Last year, Chedraui's revenues in the US surpassed its Mexican segment.
Now a household name in Mexico, Chedraui was founded in 1920 in Xalapa, Mexico, by Lazaro Chedraui, a Lebanese immigrant. The company has since grown to operate 367 stores across Mexico under its different subsidiaries.
However, the company has found pivotal openings in the US market in the past few years.
Chedraui began operations in the US in 1997 when it opened the first El Super store in Los Angeles, California. It has since increased its presence to 375 stores across California, Arizona, Nevada, New Mexico, and Texas. These states all have a significant Latino presence (30%+ of the population), and all of them, except Nevada, share a border with Mexico.
Interestingly, in 2007 it only had 8 stores in the United States, meaning that in 15 years, it has increased the number of stores in the country by a factor of 47x. How did Chedraui do this? Besides El Super's organic growth, the answer comes from two key events.
In 2018, the company announced the acquisition of Fiesta Mart, a Texas-based supermarket chain aimed at Latinos in the lone star state. The $300M deal more than doubled the number of stores it had in the country, growing from 59 to 125 stores. However, the most significant growth event to date happened in 2021 when the company acquired Smart & Final's 254 stores for a reported $620M. The deal, which tripled their store presence in the country, also signaled a strategic move into smaller, faster warehouse stores and consolidated their US presence.
Nowadays, under the leadership of Jose Antonio Chedraui, Grupo Comercial Chedraui has become one of the largest grocery chains in California and the 11th largest in the United States, operating more stores than chains like HEB and Albertsons.
It may be tempting to conclude that the company has lost focus on Mexico, its original market… but one would be wrong. The company recently acquired Tiendas de Descuento Arteli, meaning that it will start 2023 with more stores in Mexico than in the US for the first time since early 2021. This tells us that, although the company is creating and capturing new opportunities abroad, it's also keen on strengthening its presence in its country of origin. This binational diversification tells us that the future looks bright for Chedraui.