Diario | Latin America

Research evidence excerpt

Diario | Latin America

Diario

Equity Research

July 21, 2026

InRetail (Buy) | Strong Momentum Continues, Mass

Hidden Value Becoming Increasingly Apparent

We met recently with management in Lima, and reiterate our positive stance on InRetail, which

remains one of our top picks in LatAm SMIDs. Consumer trends in Peru continue to surprise

positively, with 2Q26 performance tracking the strong levels seen in 1Q26 despite higher fuel prices

and concerns around a potential El Niño event. Low inflation, stable macro conditions, a positive

political shift (with GDP expected to potentially accelerate from the current 3-4% levels to 5-6%)

and improving consumer confidence continue to support consumption across all segments, while

previous El Niño episodes have historically had a limited impact on the business given InRetail's

scale, logistics capabilities and everyday-low-price positioning.

The key driver of our investment case remains Mass, the hard-discount format, which we

believe represents significant hidden value within the group. Mass now operates roughly 1,600

stores and management sees a long runway toward 3,000+ locations, supported by low

modern retail penetration and a large traditional retail market in Peru. Operational improvements,

including dedicated distribution centers, independent commercial teams and greater private-label

penetration (already at c50%, target 70%), continue to strengthen the business model. Store

economics remain attractive, with approximately US$1m in sales per store, only US$100k of capex

per opening and mature EBITDA margins of 4-5%, while inventory efficiency is improving toward

best-in-class levels. We expect Food Retail to remain the primary growth engine, complemented by

continued expansion opportunities at Makro.