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weebray
Super Nomad
Posts: 1094
Registered: 7-19-2010
Location: La Paz
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Mood: lleno
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Oxxo
Can anyone explain the economics of Oxxo to me? They continue to spring up here in the center of La Paz on some of the most expensive properties in
the area. There is a new one being built on the corner of Revolucion y Morelos across from Mc Fishers restaurant. This is smack in the middle of a
bit of a renaissance of restored old colonial buildings. How much coke and potato chips do you have to sell to amortize this investment?
Every beautiful beach in the world needs a few condo towers - NOT.
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SFandH
Elite Nomad
Posts: 7084
Registered: 8-5-2011
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Judging by the volume of cooler space taken, beer is the money maker with flavored sugar water running a close second. Then salty, oily, deep fried
potato/corn stuff in bags, then candy, then microwave hot dogs, then cigarettes. Distilled booze and wines too. Coffee with sugar and cream in the
morning.
Probably all high profit margins.
What's not to like?
Oh yeah, usually in the back corner there will be some "fresh" fruit and vegetables.
They are almost everywhere. El Rosario has a new one. I bet on the highway at the entrance to Mulege within a year or two.
Also, I've been in a "Super Oxxo". It's like a small super market with produce and meat sections and household goods.
[Edited on 9-24-2015 by SFandH]
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MrBillM
Platinum Nomad
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The Market Working.................
Like the Market's supposed to WORK !
Contrary to the "Liberal" view of Paradise in which people are FORCED to do what's good for them.
As determined by the Government.
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AKgringo
Elite Nomad
Posts: 6025
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Location: Anchorage, AK (no mas!)
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Even if not all the stores turn a profit, if they come close to breaking even, it makes it unlikely that a competitor can open a store in that
neighborhood.
It might be a matter of being your own competition!
If you are not living on the edge, you are taking up too much space!
"Could do better if he tried!" Report card comments from most of my grade school teachers. Sadly, still true!
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bajagrouper
Senior Nomad
Posts: 964
Registered: 8-28-2003
Location: Rincon de Guayabitos, Nayarit, Mexico
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Mood: happy and retired
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I borrowed this from the PV forum. It gave me a good laugh
This came from a news release on a parody website, called "El Deforma": eldeforma.com/2015/…
A quick translation into English:
One OXXO Opens Inside of Another OXXO
--Customers are confused since they operate independently--
MEXICO CITY This morning, the 2,497,108th OXXO store was inaugurated on Revolution Avenue.
This store opened inside another OXXO that was already there, in an empty space it had. Both OXXOs operate simultaneously, but independently of each
other. (This means you can't buy potato chips from one of the OXXOs and pay at the register of the other).
The decision was made after the original OXXO had a great demand from office workers who go there daily for their lunch of Maruchan soup; but
sometimes lose in the register line, if open, the 20 minutes they are given to go to lunch.
"Rather than have another register, it was easier for us to open a new OXXO inside the other OXXO. Of course, the new OXXO will have two employees
like all the others: one who rings up the purchases, and one that tells you they will ring you up at the other register", said Archibald Andatti, CEO
of FEMSA.
With this idea, the convenience store chain will save from having to pay another rent or another operating permit. But in return, it is expected that
there is much confusion among customers, as there is no clear division between one OXXO and the other. The stores will have a policeman guarding that
the customers don't pass products from one to the other, but apparently, the same policeman does not know which is which, and he has tried to buy a
liter bottle of beer from one OXXO at the register of the other.
If the model works, OXXO will look to continue this idea of saving purchasing costs or rental of premises, and begin to open OXXOs
within 7-Eleven and Extra stores.
I hear the whales song
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rhintransit
Super Nomad
Posts: 1588
Registered: 9-4-2006
Location: Loreto
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I had great hopes for OXXOs everywhere...imagining a clean bathroom when needed. Unfortunately the individual stores didn't get the memo...I don't
even bother to stop and hope any more that one is available, functional, or clean-ish.
I believe, but don't know for sure, that they are all franchises, with the parent company providing the building. Like Modelorama. A number of
vacant ones of those around Loreto...rent guaranteed five years in advance, so no motivation for landlords to do anything about the eyesores.
reality\'s never been of much use out here...
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akshadow
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Registered: 2-1-2007
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Oxxo?
Quote: Originally posted by weebray  | | Can anyone explain the economics of Oxxo to me? They continue to spring up here in the center of La Paz on some of the most expensive properties in
the area. There is a new one being built on the corner of Revolucion y Morelos across from Mc Fishers restaurant. This is smack in the middle of a
bit of a renaissance of restored old colonial buildings. How much coke and potato chips do you have to sell to amortize this investment?
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Gee I was thinking they were money laundry locations> Why else build so many without probable profit.
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SFandH
Elite Nomad
Posts: 7084
Registered: 8-5-2011
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They are quite an operation. Wikipedia states that they opened in 1978, 37 years ago, and there are now 13,000 stores. True convenience stores. Locals
can even pay utility bills and buy cell phone minutes there. I know some gringos lament the demise of "Paty's Super Mini", the classic small town
tienda, but OXXO does a better job. Given a choice, I'd chose OXXO.
Plus, I bet the jobs they provide are relatively secure with adequate pay and benefits. Not sure about that though.
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Phil C
Senior Nomad
Posts: 564
Registered: 3-27-2004
Location: N. San Diego County/ Loreto Centro/Lopez Mateos
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OK, how do YOU say OXXO? I say O-X-O in English, I'm sure that's not right but what is?
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SFandH
Elite Nomad
Posts: 7084
Registered: 8-5-2011
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aux-zo
or maybe
aux-oh
[Edited on 9-24-2015 by SFandH]
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sargentodiaz
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Location: Las Vegas, NV
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It is wholly owned by the beverage company FEMSA (Fomento Económico Mexicano).
Eugenio Garza Lagüera was behind the beverage company and OXXO. His parents and grandparents were very influential and I image they were/are
Criollos, full-blooded Spaniards born in Mexico who constitute the modern ruling class of Mexico.
I have a hunch there was a Garza among the soldiers who came to Mexico with Cortez. 
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weebray
Super Nomad
Posts: 1094
Registered: 7-19-2010
Location: La Paz
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Mood: lleno
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The economics still puzzle me especially when you factor in the dilution of the market. There are a number of Oxxo's here within a block of each
other. Are these franchises? Do they own the land? Are they backed or financed or owned by FEMSA? I understand that Coke is the fuel of the raza
here but for hundreds of years the raza was getting all the Coke they needed at the mom and pop tiendas without an Oxxo on every corner. Has the
demand increased tenfold?
Every beautiful beach in the world needs a few condo towers - NOT.
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SFandH
Elite Nomad
Posts: 7084
Registered: 8-5-2011
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You'll need to conduct a survey I guess.
Let us know.
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bajabuddha
Banned
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Location: Baja New Mexico
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Mood: Always cranky unless medicated
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Funny about the 'money laundering' accusations. The way I heard the story, 7-11 was started up by the Tandy Corp. (Big Texas Oil, Radio Shack) to
create a negative-money-flow corporation to help assuage their gross windfall profits they were raking in.... and unfortunately for them, John Q.
Public didn't mind the incredibly over-inflated shelf prices of most goods just for convenience of not having to hit a 'big-store' and stand in line.
Point being, it's possible (just sayin') that OXXO could be in the same category. Big Business is now bigger than most average people can understand,
especially when you get into ownership of thousands of stores. Plus, the emerging middle class possibly feels it more 'acceptable' to go to a
bright OXXO than an old corner abarrotes.
Oh thank Heaven! For Seven Eleven. Can you say, "Slurpee" in Spanish? 
I don't have a BUCKET LIST, but I do have a F***- IT LIST a mile long!
86 - 45*
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Bajahowodd
Elite Nomad
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Registered: 12-15-2008
Location: Disneyland Adjacent and anywhere in Baja
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It's fairly simple. A major manufacturer of soft drinks (Coca Cola) and beer (Heineken) develops a process that cuts out the middle man. More profit
for them.
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rts551
Elite Nomad
Posts: 6699
Registered: 9-5-2003
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had to laugh at the adequate pay part.
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SFandH
Elite Nomad
Posts: 7084
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Do you know how much a cashier makes?
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El Jefe
Super Nomad
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Location: South East Cape
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But with all the OXXO's out there you still can't get a big gulp type diet coke over crushed ice with a straw! What's up with that?
No b-tchin\' in the Baja.
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rts551
Elite Nomad
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One lady I know in Vizcaino say she makes 100 pesos a shift. Seems like the norm for these type of jobs. I know a PEMEX gas jockey that only makes
80 pesos a shift.
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SFandH
Elite Nomad
Posts: 7084
Registered: 8-5-2011
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Really! That's horrible, especially considering clerks at OXXO don't get any tips, unlike PEMEX attendants.
Slave wages.
I wonder how much the store owners/managers make.
[Edited on 9-25-2015 by SFandH]
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