Suburbia’s Financial Strategies and Economic Impact Driving Sales Growth in Mexico

In addition to the transformation of the sales floor into a store, which has been a major factor in positioning Suburbia among Mexican consumers, it has also become an alternative for those who looking for quality products at lower prices, even compared to Liverpool stores.

“It is difficult to separate these two influences, image change and economic conditions, which may be driving sales. However, when looking at the evolution of the portfolio of late, we seem to be seeing a migration of consumers towards a more economical level. section, with the economic situation.

The introduction of a night sale scheme, the option of weekly payments similar to the model of stores like Coppel, the layaway system and payments with your own department card are other financial strategies that lead the chain. However, these initiatives remain a challenge for the Port of Liverpool.

Increase a portfolio that is late

The department store has revamped its card scheme, offering the classic department card and one backed by VISA. One of the initiatives that customers have widely received is weekly payments, known as mini-payments, which were introduced in May 2022. Although they were initially intended for clothes, shoes and accessories to buy, these payments have become a popular option for purchasing durable goods such as furniture, televisions, stoves and refrigerators.

An employee at the Suburbia store in the Buenavista area says: “Mini payments are available in all stores and have been very well received. Many customers prefer having the store card with credits of 2,000 pesos to choose this funding to buy other products,” says an employee at the Suburbia store in the Buenavista area.

The auditors consulted with Expansion They warn that with this strategy, Suburbia appears as a competitor for Elektra and Coppel, due to its wide geographical coverage and its strong position in different market segments.

For customers, the new concept renews the company. “There is now a greater variety of products and brands available, compared to those available in other stores,” said one customer. “If anyone questions my choice to buy in Suburbia, I remind them that it is a brand associated with Liverpool,” he said.

But the strategy to increase sales through credit has also led to an increase in the number of customers paying their payments. In the first quarter of the year, overdue loans Suburbia reached 6%, while experts believe that a healthy level of this indicator should be around 4%.

The increase in the number of current clients is not a favorable sign, although it does not represent the most critical point reached. The company managed to mitigate overdue loans by offering buyers options to refinance their loans, send payment reminders and enable balance settlement through the mobile application. they have

“We must ensure the health of the portfolio, because any restriction in this regard can have a disproportionate impact on profitability,” says Hermosillo.