Retailer managed to maintain profitability during the promotion period, with physical stores experiencing growth above 2 digits
Preliminary results of the Magalu indicate that the retailer had its best result on a Black Friday in its entire history in 2023. It was possible to maintain profitability at the level sought by the company, something that had been more difficult in recent years. In past periods, the market experienced asymmetries caused by some competitors, such as Americanas, which had an aggressive policy of lowering prices (now, in crisis due to the request for judicial recovery, this company was unable to maintain its strategy).
Magalu has been seeking to increase its profitability for a few quarters. There was a relevant factor this year with part of consumers intensely searching for refrigeration products such as air conditioning, fans, refrigerators and freezers – due to the heat wave faced in recent weeks.
This Friday (November 24, 2023), Magalu was the most searched retailer on the market Google and your app was the most searched for in app stores.
Magalu’s Vice President of Business, Eduardo Galanternickstates that the growth obtained during Black Friday is “within planning” of the company.
“Magalu has great consumer recognition on Black Friday, in a period in which we continue to be the most searched brand and with record downloads. In our view, a success”Galanternick told Power360.
HIGH IN SALES
From January to September 2023, Magalu recorded R$45.1 billion in sales. The result is 6.9% higher than that obtained in 2022, when it reached R$42.2 billion.
Even with the bet on e-commercethe company presented an increase in the number of salespeople in its marketplace. Today, there are 323 thousand sellerswhich represents an increase of 87,000 compared to September 2022.
PHYSICAL SALES
Black Friday 2023 also demonstrated that physical retail is still far from over. The sales growth of Magalu’s physical stores was 2 digits, even when compared to 2022.
Today, the company has 1,303 units and a universe of 36 million active customers, summarizing the company’s strong participation in retail.
In 2022, Black Friday coincided with FIFA Football World Cup – something unprecedented, as this sporting event is generally held in July. There was great demand for TV sets. Still, the 2023 promotion period surpassed last year’s in sales.
The contribution of physical store logistics helps to improve Magalu’s profitability. Around 50% of what is sold online passes through physical stores at some point, which drastically reduces operating costs. With lower costs, profitability increases.
Galanternick reinforces the importance of physical stores for good results in 2023: “I’ve heard a lot of questions about physical stores, that retail is over, and we’re not seeing that. Physical stores had good sales growth compared to last year. And growth after a year in which we had a lot of media, which was the World Cup. We were selling a lot of television. It is a sign of the healthy condition of our stores”.
The Commercial and Operational Vice President of Magalu, Fabrício Garciastates that the growth achieved during Black Friday also ensured greater profitability compared to previous years. “It was a Black Friday in which we are performing well in markets where we recently opened stores, especially in Rio de Janeiro and Brasília”it says.
According to him, the drop in the basic interest rate, the Selic – currently at 12.25% – contributes to this performance.
“We noticed that, as the interest rate starts to fall, the scenario starts to be reversed. Part of the performance of physical stores has to do with this. There was an improvement in credit approval, which is very important in our business. The fall in the Selic is already starting to have an effect”he declared.
Disclaimer: Magalu’s CEO, Frederico Trajano, is a minority shareholder in the digital newspaper Power360.
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