Discount Retail Chain Tiendas TuTi continues to grow with the opening of two stores in the cities of Huaquillas and Guaranda. This retail has experienced impressive growth since it opened its first store, 5 years ago, due to the extremely low prices, variety and quality of its products.
Tiendas Tuti, a company of the economic group Corporación El Rosado, which opened its first store in Guayaquil in April 2019, and already operates with about 297 stores, according to its website, which offers the location of the stores.
TuTi is one of the first supermarket chains to arrive in Huaquillas and Guaranda, in order to reactivate the economy and deliver a variety of foods to both cantons. During the opening of the premises, several citizens expressed satisfaction.
El TuTi opened stores in Huaquillas and Guaranda
Evelyn Murillo commented "we were anxious for the arrival of TuTi in Huaquillas". For her part, Carmen Jimbo described the arrival of TuTi in her city as excellent. "You always get cheaper prices, especially now that the economy is very difficult, this news has fallen wonderfully on us," he said.
Discount Format
TuTi Stores offer low prices every day. The stores sell products of all categories: groceries, bakery, pets, dairy, candy and snacks, personal care, frozen, beauty, beverages, pets, among others.
The products are displayed inside cardboard boxes as if they had just arrived at the commercial premises. Most of its brands are its own and prices are usually lower than in other retail chains.
The discount chain has a presence in 55 cantons and nine provinces of the country: Guayas, Manabí, Bolívar, Cañar, Chimborazo, Los Ríos, Santa Elena, Pichincha and Santo Domingo de los Tsáchilas.
In Guayas alone there are 168 Tuti stores, mostly in Guayaquil. The second province with the most establishments is Manabí, with 65. And, in third place, Pichincha, with 30 stores in Quito, including rural parishes.
Cost savings
TuTi offers a "small assortment" of products, which includes the most important items of daily consumption.
In addition, it avoids any type of cost, which can increase the sale price of a product: "Our stores are not very large and are simple (...), the presentation in our products is simple, our marketing expenses are very low."
Another characteristic of this retail chain is that it does not accept customers to pay with debit or credit cards, only in cash.
According to the notes to the 2022 financial statements published in the Superintendence of Companies, payments are solely in cash. Avoiding "credit risk", which are financial losses in the event that a customer does not comply with their credit card payments.
In addition, this modality saves expenses for the company, as it does not use points of sale (POS) for card collection or have to pay fees to the financial institutions that issue the cards.
Buying Strategy
The commercial strategy that Tuti has implemented in Ecuador is known as 'discounter', a retail channel that are growing in Latin America, in which products are offered at lower prices than traditional retail chains.
A characteristic of this model is the strong presence of own brands, that is, those that are produced exclusively for that retail chain.
Tuti's own brands have different commercial names, although they are only available there, as is the case with those of other supermarkets.
The products are made by different mass consumption companies, such as La Fabril, which manufactures margarines and oils under the Gutti brand. Another supplier is Dulcenac, which makes cereals, Muky brand.
They also offer well-known commercial brands that are found in other supermarkets, including Bimbo.
According to the market consultancy Kantar World panel, the 'discounter' strategy is based on three pillars: more than 70% of the portfolio are own private label brands, limited assortment of products and low prices every day, without promotions.
This strategy "democratizes" the consumption of certain categories, which previously did not reach lower strata of the population. For example, mature cheeses, nuts or wines. Tuti sells wines for USD 3.00.
According to Kantar, the 'discounter' is changing the dynamics of consumption in all strata. This has happened faster in Guayaquil, where 8 out of 10 consumers are shopping at TuTi.
For the first quarter of 2023, the average expenditure for each purchase made by a customer in this retail chain was USD 8, according to Kantar, which measures real consumption in different sales channels.
In the process of expansion
Tiendas Tuti shares the same shareholders as Corporación El Rosado. These are the U.S. companies Upper New York Investment Company, with 51% of the shares, Upper Hudson Investment Company LLC, with 49%, and North Park Avenue Investment Company LLC, with 1%.
In 2022, the company obtained revenues of USD 240 million, that is, USD 154 million additional to what was obtained in 2021, according to information published in the Superintendence of Companies.
In addition, by the end of 2022 it had assets of USD 99.5 million and liabilities of USD 122.5 million.
"Being a new company, in the process of expansion, during the 2023 financial year the company's strategy has not changed with respect to 2022 and continues with financing with own and third-party funds," reads the notes to the 2022 financial statements.
Tuti operates with leased premises. According to its website, it is looking for "land" and "commercial premises", of 350 square meters or more and only on the ground floor, to continue its expansion in the country.
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