Walmart Brasil became Grupo Big and retired the Walmart name to cut costs
Advent's restructure kills the Walmart brand across 127 hypermarkets, ends a 0.7%-of-sales royalty, and targets break-even by early 2021.
What was changed
Walmart Brasil announced on 12 August 2019 that it would become Grupo Big and retire the Walmart brand in Brazil by the first half of 2020, in president Luiz Fazzio's first interview since US parent Walmart sold 80% of the retailer to private-equity firm Advent in mid-2018. The economics were blunt: the company paid Walmart a monthly royalty of 0.7% of sales for the name, and ending it had a direct, positive effect on margin. 'It was better to do this now than keep the Walmart name — it would be stupid to improve the business and then swap the brand,' Fazzio said.
The portfolio splintered back into local brands with regional strength. Of 127 hypermarkets, about 100 would convert to Big (south/central-west) and Big Bompreço (northeast) by June 2020, the rest to Maxxi Atacado cash-and-carry or Sam's Club. Supermarkets split into Super Bompreço in the northeast and Nacional in the south, killing the six-store Mercadorama brand; network brands fell from nine to seven. Fazzio cited research with 580 shoppers in five states showing Bompreço and Big carried stronger regional affection than the global name ever had.
Under a plan called Projeto Fênix — reviving the Fórmula 1 programme Fazzio ran at Carrefour Brasil from 2009 to 2013 — the group reopened supplier renegotiations, restored volume-bonus agreements, returned to high-low promotional pricing, and reinstated daily competitor price checks. It closed 24 underperforming stores since January, shut the loss-making e-commerce site in May with 70 layoffs, and planned to swap the checkout IT system run from Bentonville — whose failures had halted Brazilian tills — by March 2021. 2018 gross revenue was R$24.5bn, down 13%.
Why it worked
The Walmart name carried a 0.7%-of-sales royalty yet never had the equity in Brazil that it had abroad.
Regional brands outperformed the global one in customer affection research across five states.
Margin recovery was planned through cost reduction, not price rises — renegotiations and bonus deals restarted from zero.
Closing the site, 24 stores and shared-services dependencies cut cash burn ahead of a targeted early-2021 break-even.
What can be applied
A global brand name is a rented asset: when it costs margin and never fit the market, retiring it during a rebuild beats polishing a label you'll drop anyway.
Aftermath
Hypermarket conversions were set to finish by June 2020 and supermarkets in the second half of 2020, taking the group to 433 stores; break-even was targeted for early 2021 with a small positive EBITDA by year-end. Advent, which can hold investments up to 12 years, saw its exit via IPO or sale; Fazzio floated relaunching e-commerce between 2021 and 2022.