Oxxo abandons slogan ‘open 24 hours’ and adopts ‘oh-wan-sô, it’s always close’

William (not his real name) works under stress. A store attendant at the Oxxo market (reads ó-quis-sô) in the central region of São Paulo, he is at the checkout most of the time, while another attendant helps with stock replenishment. Due to the layout of the store, the location of the cashier is very close to the entrance, on the edge of the sidewalk. It has happened that someone comes in and announces a robbery or steals products.

He says that the atmosphere is tense most of the time, because there is no security. But for the colleague who stays from 10 pm to 6 am, it’s much worse: he’s alone in the store, which has the slogan “Market open 24 hours a day”. The door of the establishment, on the way to the Marechal Deodoro subway station, is always open.

William’s concern is the setback of a business model that is growing rapidly in the metropolitan region of São Paulo: the Oxxo market, of the Nós group (result of the association between the Brazilian Raízen and the Mexican Femsa), reaches the end of this month with 200 stores, also present in the interior of São Paulo (Jundiaí, Campinas, Piracicaba and Sorocaba; in the latter, the 200th point of sale will open on the 29th).

In December, when it completes three years of operation in the country, Oxxo opens five more stores. Between January and March 2023, however, it will accelerate to the point of reaching 105 openings.

Founded by Femsa 45 years ago, to sell surplus beverage production to retail, the Oxxo chain became a phenomenon in the proximity market at the turn of the 2000s: it went from 800 stores to 21,000 in Mexico, in 22 years. In the São Paulo market, where the rapid expansion since the end of 2019 has already generated memes on social networks, the company repeats the lean model, with a single employee in most stores, with security restricted to a camera circuit and an outsourced patrol .

“Part of our value proposal is to deliver competitiveness, cost-benefit for the consumer. This implies a service structure that is as efficient as possible, which allows me to open three markets in a neighborhood, instead of one”, he told the Sheet the president of the Nós group, Rodrigo Patuzzo, 46, who rejects public safety issues as a problem for the chain.

“Which market has never suffered a theft?” he asks. “We have a small number of robberies and thefts, with 80% of occurrences occurring during the day, as happens anywhere on the planet, and in any retail chain”, he says, recalling the 2,500 Oxxo stores in the City of Mexico. “What novelty would we have in coming to São Paulo?”, He says, referring to the dimensions and complexities of the Mexican capital, which has around 9 million inhabitants. The city of São Paulo has just over 12 million.

According to him, there was only one case of trawling, about four months ago, at a chain store in São Paulo.

According to Abras (Brazilian Association of Supermarkets), to which Oxxo is not associated, 30% of establishments registered, in 2021, some occurrence related to robberies and robberies, 78% suffered internal thefts (by employees themselves) and 88% external thefts (customers).

The company is leaving behind the slogan that has been with it since its arrival in Brazil “Oxxo – 24-hour open market”, to adopt a new one, which teaches the correct pronunciation of the name and will be the motto of the campaign prepared by the Mestiça agency: ” You say ‘Ó-quis-sô’ and it’s always close”. “By the end of the year, all the facades of our stores will receive the new slogan”, says Patuzzo.

The change, he says, has nothing to do with fewer stores working 24 hours a day – today 20% close their doors at 10 pm. According to the executive, this percentage was already foreseen in the expansion of the network in the country.

Part of the points that remain open work with a “security window”: the customer arrives at the store, which has the door half-open, presses the bell and the attendant searches inside the establishment for what the consumer needs. Everything on the front of the store, under special lighting and a security camera.

“But this has less to do with security and more with our control, since only one employee usually stays overnight”, says Patuzzo. “Most stores, which have only nine months of operation, have only one worker per shift. If the employee is absent and does not notify, eventually, the store will not even open,” he says.

The number of employees per store depends on how much the establishment invoices, he explains. “If the store has already reached its potential revenue and has more movement, it will work with three employees in the morning, three in the afternoon and two at night. If it has not reached it, we will adapt the team”, says the executive. “We are still testing technologies and service formats.”

Chain will launch application to increase delivery sales

In addition to Mexico, Oxxo is also present in the markets of Colombia, Chile and Peru. For Brazil, the Nós group has big plans. “The country is the only market in Latin America where what was done in Mexico can be repeated. Or even more”, says Patuzzo, who plans to open 215 stores next year, all in the São Paulo market.

“Expansion outside the state of São Paulo will take place at the end of the next 18 months, preferably in the Southeast region”, he says.

One of the company’s biggest bets will be launched by the end of December: the Oxxo app, which will allow new features such as the “click and collect” service (the customer makes the purchase online and picks it up at the store), payment via Pix (which also should start to be accepted in physical stores), the use of lockers (cabinets to store purchases made online) and delivery. “Today we work a lot with iFood, but we are going to expand the delivery service with our own platform.”

Another novelty is the launch of a loyalty plan. “There are customers who go to our store three times a week, or six or seven times a month”, says Patuzzo. “In the future, Oxxo’s loyalty plan could connect to that of the group’s convenience store chain, Shell Select,” he says.

The expansion of the own brand is also under study. “Today, our own brand is limited to food service, it is necessary to have a minimum scale to enter other categories.”

Nós keeps the criteria for choosing the location of new stores under lock and key, based on artificial intelligence. But Patuzzo gives some indications. “We have an algorithm that considers a large number of variables, with 10 being the most relevant”, he says. “Among them, proximity to large flow generators, such as the subway and bus terminal. It is a positive influence, which can be reflected in the number of transactions, average ticket or sales distribution — but not necessarily all of these items.”

The executive draws attention to a recent move by Femsa: the acquisition of the proximity markets network Valora, for US$ 1.2 billion (R$ 6.4 billion), in July. The Swiss chain has 2,700 stores and is spread across Austria, Germany and the Netherlands. “The group sees this business as one of the main paths for consolidation and international growth,” he says.

Retail specialist Alberto Serrentino, a partner at Varese Retail, agrees that the Oxxo model does not fit investment in 24-hour security. “It is natural for them to gauge where it really pays to stay open 24 hours a day, where there is demand, traffic and is a safe place, where the store is not so vulnerable”, he says. “Otherwise, the account does not close, it becomes unfeasible. It is the Brazil cost.”

According to him, Oxxo is a store where the consumer buys few items, spends little, in an assortment aimed at convenience. “The customer goes for the convenience and speed”, he says. “But it is a model that needs density and high capillarity, because the logistics are complicated. It only stops standing if there are a lot of stores in a certain geographic concentration”, he says. Hence, therefore, the focus on São Paulo.

Profile – Grupo Nós

• Foundation: 2019 (50% Femsa and 50% Raízen)
• Flags: Oxxo and Shell Select
• Number of stores: 200 Oxxo (owned) and 1,241 Shell Select (owned and franchises)
• Employees: 2,643 (administrative and own stores)
• Presence: São Paulo, Guarulhos, Santo André, São Bernardo do Campo, São Caetano do Sul, Osasco, Campinas, Jundiaí, Piracicaba and Sorocaba (Oxxo stores)
• Mainly competitors🇧🇷 Carrefour Express, Hirota Express, Minuto Pão de Açúcar, Mini Mercado Extra, Dia (Oxxo); AM PM and BR Mania (Shell Select)
• Invoicing: BRL 147.7 million*

*referring to the 3rd quarter of 2022

Source: company