Mexico’s largest private retailer, Coppel, is planning to invest 14.2 billion pesos (about US$690 million) in 2025 — more than 60% of which will fund 100 new stores this year and the renovation of another 66 locations.
“How people consume in one country is absolutely different from how they consume in another one,” said Chairman and Chief Executive Officer Agustin Coppel Luken.
To ensure its success, the company is leaning further into its target demographic of low-income shoppers, to whom it offers the option to buy items such as sofas and iPhones on credit at interest rates of as high as 90%. It’s also capitalizing on online sales by setting up kiosks in stores to allow customers to browse and buy from its digital catalog.
Though Coppel has to overcome its reputation as “the credit of last resort” in order to fully tap Mexico’s rising middle-class pocketbook, it’s making a lot of smart moves, said Dave Marcotte, senior vice president for global retail at Kantar Consulting.
“They’ve done everything right. They’ve expanded their catalog, they’ve expanded themselves into vehicles and higher ticket items,” Marcotte said. He attributed Coppel’s strength to its in-house bank, a trait shared by Coppel’s rival Grupo Elektra, as well as higher-end department stores El Puerto de Liverpool and Palacio de Hierro, the latter of which don’t have banks but offer lines of credit.
The family-owned business has grown from a single gift shop in the coastal city of Mazatlan into a nearly 1,900-store operation in more than 600 cities and towns. Even though shopping in person still holds strong in Mexico, giants such as MercadoLibre Inc. and Amazon.com Inc. have brought the retail market into the 21st century and forced big chains like Coppel to adapt.
E-commerce is the fastest-growing segment of Coppel’s business, with part of the 2025 investment going toward the expansion of eight distribution centers and the inauguration of another six facilities. Another chunk of its investment will focus on the back end of its banking arm, BanCoppel, and on the company’s app, where customers can apply for credit.
“We still have a lot of opportunities to capitalize on this ecosystem of the stores and the app,” Coppel said. “Stores generate a high flow of traffic, and we have the credit history of those who have made purchases. We can leverage this reality.”
Luis Coppel Rivas and Enrique Coppel Tamayo, Agustin Coppel’s grandfather and father, opened the family gift shop in 1939, before later moving the business to nearby Culiacan, the capital of Sinaloa. They branched out into goods like bicycles, furniture, and electronics.
Early on, they started extending credit to customers and created the Coppel card for purchases in 1970. By the following decade, Coppel Tamayo’s eldest son — also named Enrique — had taken the reins of the operations, expanding to cities across Mexico and broadening their product offering.
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Source: Bloomberg
