GNC to add 20 Mexico stores in 2019 – it's a market that 'continues to grow', exec says

15-Feb-2019 - Last updated on 15-Feb-2019 at 19:18 GMT

Image courtesy of GNC Mexico

Supplement retail giant GNC will add an additional 20 stores to its Mexico network this year, despite some financial setbacks related to peso devaluation and import taxes, says the CEO of GNC Mexico.

GNC (General Nutrition Centers) opened its first Mexico store in 1991, marking the retailer's first venture outside of the home US market. Now present in all Mexican states with 620 stores, GNC will continue to expand its network.

GNC Mexico operates under the holding group Axera, which last month sold its two other retail brands – TAF and Truekids – both sneaker outlets.

Marco A. Canavati, CEO and master franchisee at GNC Mexico, said the sale of these two shoe wear brands enabled solid focus on GNC and expansion would be very specific.

“Since we already cover all the states in Mexico, including big, medium and small cities, we are focusing on specific locations, in some cases new malls, to expand. The idea is to include about 20 more stores during this year,” Canavati told NutraIngredients-LATAM.

The expansion comes in spite of some challenges facing Mexico's nutrition market, he said.

“It continues to grow, but considering the peso devaluation, sales tax for supplements and import taxes in recent years, prices went too high and it has impacted the revenues.”

GNC has been struggling with global earnings since 2015, reporting a slide each quarter rather than growth. Company CEO Ken Martindale last year announced plans to close 200 underperforming stores and bolster business with outside investments.

However, Canavati said there remained great opportunity to help Mexico “better understand supplements and their benefits” and so GNC Mexico would push forward with plans to strengthen its position as a “market leaders in imported brands”.

In the footsteps of the US...

Canavati said the most popular nutrition products in Mexico, currently, were multivitamins, omegas and proteins, and consumer trends tended to mirror those found in the US.

“[The market] has been evolving similarly to the US, but a couple of years behind. ...Usually the trends come from the US. So, whichever category or product becomes popular in the US, it will eventually become popular in Mexico. And, almost all the innovation for new products comes from the US,” he said.

Whilst this was positive in many ways, he said it also presented challenges because, beyond proving expensive, importing into Mexico was also quite complex.

“Complying with all the regulation for importation is very hard with a lot of documents required in each import, and the regulation changes with some regularity.”

Asked how online business compared to regular stores in Mexico, he said: “Online has been growing but brick and mortar is still the biggest part of our business.”

GNC is present in numerous other Latin American countries, including Costa Rica, Colombia, Guatemala and Brazil, among others.