GPA pushed its 300-store Pão de Açúcar expansion back to 2026 and closed weak stores
Eleven underperforming stores shut in late 2023 and the 300-store plan's deadline slipped from 2024 to 2026, as GPA's margins turned.
What was changed
GPA told the market on 22 February 2024 that it had closed 11 stores between October and December 2023 — four Pão de Açúcar, three Extra Mercado, two Mini Extra and two Minuto Pão de Açúcar — leaving 767 units in Brazil. On the analyst call, CEO Marcelo Pimentel said three or four of the closures were temporary and the rest were units performing below expectations.
The closures were the tail end of a bigger revision GPA had announced in December: the deadline for opening 300 new Pão de Açúcar stores moved from 2024 to 2026. The previous plan, drawn up for 2022–2024, had reached only 121 stores by September 2023 and 133 after the fourth quarter. GPA framed the change as 'optimisation of the company's investment level, aiming for the best possible return for the shareholder, given the most recent market conditions'.
The numbers behind the retrenchment showed the rationale: 2023 reversed the margin losses of 2022, with gross margin up from 24.8% to 25% (fourth quarter: 22.6% to 25.7%) and EBITDA margin from 6.6% to 6.8% — 5.9% to 7.7% in the quarter. Operating cash flow reached R$907m, a R$1.4bn improvement on 2022's R$532m deterioration. 'We're back to the basics done well,' Pimentel said, calling 2024 the final year of the turnaround begun in 2022. Same-store sales ran hotter in proximity formats (5.6%) than Pão de Açúcar (4.2%), partly because Pão de Açúcar's categories saw stronger deflation.
Why it worked
Underperforming units were still consuming capital: eleven stores shut in a single quarter, most below expected performance.
The 300-store plan was at 133 stores in its deadline year, so the timeline rather than the ambition had to give.
Management chose return over pace, citing optimisation of the investment level for the best possible shareholder return.
What can be applied
When the deadline arrives before the store count does, change the deadline on paper before the cash flow forces you to change it in fact.
Aftermath
GPA entered 2024 with net debt of R$2.18bn including unanticipated receivables — up R$159m on the year — but leverage steady at 1.7x EBITDA (1.8x in 2022), as EBITDA growth kept the ratio in check. Pimentel framed 2024 as the turnaround's last year.