Tiendas D1 – Colombia

The first three stores of the company which was founded by Michel Olmi were opened in Medellin at the end of 2009. We were hired as consultants at the end of 2010. D1 had done a lot of groundwork but realized that the seemingly simple Hard Discount business model was not quite so easy to establish and develop. When Nils Brandes left the company as at the end of 2018, D1 had almost 1,000 stores and was just starting to be profitable. Today, D1 is the largest grocery retailer in Colombia with 2,500 stores.

As a consultant, Nils Brandes traveled to Colombia once a month for about 10 days, attended the most important meetings and, together with the management, monitored the increasing number of regions through so-called control visits.

For a long time, D1 kept the so-called “Limit of Discipline” and sold only a product range of 500 items. This extremely limited assortment allowed to generate excellent high sales. D1 strictly followed our guidelines and, for example, only started to include fruit and vegetables very late. Compared to the market leader at the time, Exito, Tiendas D1’s shopping baskets were around 40% cheaper. It is fair to say that D1 has noticeably changed consumer behavior in Colombia. While low prices are normally associated with poor quality, D1 sold products of high quality and regularly monitored this through laboratory tests.

Some items that traditional supermarkets sell at too high a price for the average consumer, D1 offered at very affordable prices and made them popular in the country. These include cold-pressed extra virgin olive oil from Spain. D1 also managed to make Chilean wines affordable and successful in the “beer country” of Colombia. These remarkable successes were a consistent implementation of the principle of not focusing on the gross profit of the product, but rather gradually increasing volumes at a low price. The gross profits then came as a result over time.

Nils Brandes, September 2024