Subscribe to Entrepreneur for $5

Small grocery stores fear they will not survive closure due to second wave of COVID-19

As of July 2020, 150 thousand of these small businesses had closed in Mexico.

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

While Mexico exceeds one million cases of COVID-19 and regrets more than 100,000 deaths, there is a sector that is struggling to survive the pandemic: grocery stores. These small businesses fear that a second wave of infections will mean another lockdown and cause more businesses to close.

Cortesía Virtual Market

"If the second wave tightens, which seems to be tightening, there is the possibility that a wave of business closures will come again in the month of November and December, " admitted Cuauhtémoc Rivera, president of the National Association of Small Merchants ( ANPEC), in statements cited by EFE .

The lockdown, which began in March 2020, caused a wave of store closures starting in May. According to Rivera, as of last July about 150,000 of these businesses and the jobs they generated had been lost .

In Mexico there are 1.2 million registered grocery stores, offering income to 3 million families. These businesses represent 6% of the country's gross domestic product (GDP) , generate 35% of retail consumer sales and 50% of consumer product sales.

According to data from ANPEC, there is a 20% increase in the practice of "asking for credit." In addition, fixed expenses such as rent and payment of electricity are taking a large part of their income.

And the supports?

The president of ANPEC took the opportunity to express that, from his point of view, the new normal "has not worked", since the increase in inflation and the fall in consumption have not been mitigated. Rivera commented that he has only had support from one brand of popcorn, which gave him a security screen.

Some companies have launched initiatives to support shopkeepers, as is the case with Industria Mexicana de Coca-Cola. The stores represent their main distribution point, but they estimate that some 500,000 stores could close by 2021.

In addition to handing out protective screens, the company devised a plan to boost grocer sales. The strategy includes affordable promotional packages, product and inventory loan, consumer discounts, support to digitize stores, promote local purchases and facilitate alliances with merchants in the sector.