Tiendas 3B: the BBB Foods business model
Tiendas 3B, a Mexican discount retail chain owned by BBB Foods Inc. operated 2,288 stores at the end of 2023, with annual sales of US$2.3 billion.
Headquartered in Mexico City and founded by Anthony Hatoum, Tiendas 3B operates primarily in the grocery and convenience store sector and is known for offering a variety of products at affordable prices.
The company is a pioneer and leader of the hard discount grocery model in Mexico and one of the fastest-growing retailers in the country, as measured by its sales and store growth rates.
What does 3B stand for? The name refers to «Bueno, Bonito y Barato», a Mexican saying that translates as «Good, Nice and Affordable».
In their own words, this phrase sums up BBB Foods’ mission to deliver irresistible value to budget-savvy consumers through high-quality products at bargain prices.
From 2020 to 2022, this company’s total revenues grew at a compound annual growth rate (CAGR) of 34.4 percent, reaching P32.6 billion ($1.85 billion) by 2022, and its store count increased from 1,249 at year-end 2020 to 2,288 at year-end 2023, representing a CAGR of 22.4 percent.
Its total revenues for the 12-month period ended September 30, 2023 were Ps41.2 billion (US$2.3 billion).
Tiendas 3B
The company’s business model is simple but disruptive: it offers a limited assortment of products that meet the daily food needs of its customers.
BBB Foods prices its products to offer a generally market-leading value for money: the lowest sustainable price in the market for a given quality.
The stores also offer convenience, as they are generally located within central neighborhoods that allow for daily visits and minimize their customers’ transportation needs.
Customers visit 3B Stores on average three to four times a week to fulfill one or two shopping days.
The 3B Stores product range consists of approximately 800 stock-keeping units (SKUs) of branded, private label and spot products.
On the one hand, BBB Foods sells branded products, which it offers at the lowest sustainable price in the market to attract customers and drive traffic. For 2022 and the nine months ended September 30, 2023, branded products accounted for 51.8% and 48.8% of its sales, respectively.
On the other hand, private label products are products that the company has developed itself and that it believes are of comparable or better quality than the equivalent branded alternative offered in its stores.
For 2022 and the nine months ended September 30, 2023, private label products accounted for 42.8% and 45.4% of its sales, respectively.
