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Construction of Megamaxi begins in Cuenca and will bring hundreds of new jobs

Published on August 30, 2021

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Corporación Favorita expects to create 600 construction jobs and 350 direct jobs in the commercial premises when they open their doors in early 2023.

The first Megamaxi in Cuenca will rise at the foot of the Yanuncay River. Corporación Favorita presented the new project on Tuesday, August 24th, and laid the first stone for this construction.

The estimated investment is $36 million and is part of the corporation’s Five-Year Investment Plan, which highlights the jobs that will be generated.

During the execution of this project, more than 600 construction workers will be employed.

The commercial premises will open their doors at the beginning of the year 2023 and estimate that there will be around 350 direct jobs, and indirectly 1,000 positions are calculated.

The infrastructure will be built at Ave. 24 de Mayo next to El Paraíso Park, within a new area on a 14,600 m² (3.6 acres) plot of land. It will have two levels of parking, and within the commercial area the opening of subsidiaries of Corporación Favorita is planned, such as MegaKywi and Sukasa, as well as a gym, financial institutions and food stores.

The civil works will be about 55,000 m², and Megamaxi will have an area of ​​6,000 m².

The premises will be built under LEED environmental certification standards, incorporating strategies related to the environment, design and efficient systems that allow achieving greater energy efficiency, less water consumption, less impact on the environment, less contribution to the carbon footprint and better comfort conditions for its users. There is also a GIRA Point, where customers and the community can deposit ten types of recyclable waste, which are processed and managed by GIRA, a subsidiary of Corporación Favorita.

The Megamaxi format offers more than 101,190 items and was born in 1997. This first in Cuenca will be number 15. There are six in Quito, four in Guayaquil and one in Samborondón, Manta, Sangolquí and Ambato.

Supermarkets increased revenues and profits amid pandemic

Not surprisingly, Corporación Favorita’s expansion is evidence of its growth in revenues as people were isolated in their homes for most of 2020. Something experienced for most of the country’s supermarket chains.

In a year in which families prioritized food over other luxury expenses, the purchase value per customer and number of items per basket increased in some of the main supermarkets in Ecuador during 2020.

The sale of food products for mass consumption was on the rise and eased the downturns in other categories. That was what allowed the main supermarket chains to end the year with different figures than other sectors that experienced significant drops in their income.

The reports sent to the Superintendency of Companies, shareholders, and the Stock Exchanges by Corporación Favorita, Corporación El Rosado (Mi Comisariato) and Tiendas Industriales Asociadas (TIA), the large groups that manage supermarket chains, describe part of these scenarios.

The three main business conglomerates had revenues that exceeded $4.061 billion and net profits that totaled $204.15 million in 2020.

Corporación Favorita, owner of Supermaxi, Megamaxi and other formats, informed its shareholders that one of the consequences of the emergency derived from the pandemic was the drop in sales of items such as entertainment, clothing and luxury items, but food products for mass consumption had an increase.

Despite the hard time caused by the health emergency, which was coupled with the complex economic situation that dragged down the country, Corporación Favorita reported that its income was 3.4% higher than in 2019.

The company ended the year with revenues of $2.111 billion from its Supermaxi, Megamaxi, Akí, Gran Akí, Super Akí, Akí Vecino, Juguetón, Super Balandos, Titán and Möblart formats. This was an increase in revenues of $63 million over 2019.

With the income of its subsidiaries, its revenue hit $3.404 billion, or $178 million more than the previous year. This group included Comohogar, Kywi, MegaKywi, TVentas, Maxitec, Mr. Books, Agropesa, and others.

The net profit of the Favorite Corporation reached $147.5 million, $8.3 million less than in 2019.

The chairman of the board of that business group informed its shareholders that expenses, especially for COVID-19, were higher in 2020, so the net profit was lower. The costs associated with the pandemic amounted to approximately $18 million.

During this period of pandemic, the corporation put some plans on hold, but was able to open four new stores in Ecuador and two in Panama, where it owns Grupo Rey, a supermarket chain that had a 2% increase in revenue. Likewise, it remodeled three stores in Ecuador and one in Panama; two were left pending in Ecuador due to the pandemic.

“The normal rhythm of the business was upset, and our companies suffered a decrease in their sales and/or profits, but thanks to the strength of the main business area, food, added to the commitment, resilience and effort of the work teams, we will continue to forward, evolving and adapting to new circumstances,” said the manager in his report.

The El Rosado Corporation, owner of Mi Comisariato, Hipermarket and other businesses, had revenues of $1.249 billion during 2020, according to the report sent to the Superintendency of Companies. With this, it exceeded the $1.168 billion of the previous year.

This item of income places it, for the moment, as the main company in Guayas in the Superintendency ranking, surpassing Conecel (Claro, with $1.066 billion), based in the same province.

Its net profit last year reached $27.62 million. In 2019, its profit was around $28.65 million.

In one of the reports sent this semester to the stock market, El Rosado indicated that for 2020 the growth of income was accentuated to a greater extent by market conditions, considering the health emergency, where the consumption of goods of first necessity increased as a supply measure to face the various confinement modalities.

Contrary to this, the Ferrisariatos, Río Store, Toy stores and restaurants segments were affected by the health emergency, reporting a decrease in their income compared to previous periods.  Ferrisariatos recovered during the second half of 2020, exceeding the income levels of previous years. Río Store and Juguetería maintained lower comparative sales.

Tiendas Industriales Asociadas (TÍA), the third largest chain by billing, recorded revenues of $701.57 million, according to data from the Superintendency of Companies. Compared to its 2019 revenues, which reached $707.46 million, 2020 revenues were down by $ 5.89 million.

TÍA’s net profit in the year of the pandemic reached $29.03 million, a figure higher than the $28.97 million it made in 2019.

This chain has leveraged its growth in recent years in the expansion of its stores, which exceed 230. During 2020, TIA reported on the stock market that it focused on the opening of new stores under the format ‘More Savings.’ At the beginning of this year, it had 35 stores located in different provinces of the Costa region in this format.

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