Grupo Mateus Cuts 6,600 Jobs and Shuts 28 Stores to Save Margins

Brazil · Retail

A retailer can grow its sales and still feel the squeeze. Grupo Mateus, one of Brazil’s largest grocery chains, is laying off thousands and shutting stores even as revenue climbs, a sign of how hard the country’s weak consumer is pressing on margins.

What is behind the Grupo Mateus layoffs?

The Rio Times, the Latin American financial news outlet, reports that the Grupo Mateus layoffs are part of a cost-cutting and productivity drive launched in December 2025 and intensified through the first quarter of 2026. The company, founded by entrepreneur Ilson Mateus and dominant in Brazil’s north and northeast, has trimmed its headcount by roughly 6,673 positions, from about 47,900 to 41,200, alongside the closure of 28 stores it deemed unprofitable.

Executives described the move on an investor call as a “surgical adjustment” to protect profit margins and lift productivity. Ilson Mateus put it bluntly, saying the company is hunting for an “optimal point” between expenses and operating margin, because cutting too much creates problems while cutting too little leaves costs intact.

How did the latest results look?

The first-quarter numbers tell a split story. Net revenue rose 12.9% to R$9.4 billion (about $1.7 billion), but net income fell 21.8% to R$212.9 million (about $38 million), pressured by higher expenses and a weaker financial result. The headline growth was driven almost entirely by acquisitions rather than organic gains.

The clearest warning sign was same-store sales, which fell 7.3%. The company blamed food deflation, particularly in commodities, along with higher household debt and a shift toward smaller, cheaper shopping baskets. To defend profitability, it deliberately gave up some sales volume in channels it described as margin-eroding.

Why is a growing retailer cutting jobs?

The paradox of rising revenue and falling profit explains the strategy. Gross profit actually rose 16.1% to R$2.15 billion (about $387 million) and gross margin widened to 22.9%, but post-lease earnings slipped and operating expenses climbed sharply. Closing weak stores and reducing staff is the company’s way of converting that gross-margin strength into bottom-line results.

The discipline showed elsewhere in the balance sheet. The chain generated R$323.5 million in cash during the quarter and cut net leverage to a low 0.33 times earnings before interest, taxes, depreciation and amortisation. Even so, the company has not cancelled its expansion plans outright, instead subjecting any new investment to a tougher review.

What does it signal about Brazil’s consumer?

The squeeze reflects a wider strain on Brazilian shoppers despite a resilient headline economy. High interest rates, elevated household debt and food deflation are reshaping how families spend, pushing them toward lower-ticket purchases and away from discretionary categories like appliances.

Grupo Mateus is not alone. The cash-and-carry segment, dominated by giants such as Assai, Atacadao and Carrefour, has seen rivals slow store openings and prioritise efficiency over aggressive growth under the same pressures. Investors appeared to welcome the discipline, with Grupo Mateus shares rising on news of the cuts.

What should investors and analysts watch next?

• Same-store sales: a turn in the 7.3% organic decline is the key test of whether the strategy is working.
• Margin conversion: watch whether the strong gross margin finally flows through to net income in coming quarters.
• Expansion discipline: the pace of new store openings will show how cautious management has become.
• Consumer backdrop: interest rates, food prices and household debt remain the external drivers of demand.
• Competitive pressure: moves by Assai, Atacadao and Carrefour will shape the cash-and-carry battle in the north and northeast.

Frequently Asked Questions

How many jobs did the Grupo Mateus layoffs cut?

About 6,673 positions since December 2025, reducing the workforce from roughly 47,900 to 41,200, or close to 14%, alongside the closure of 28 stores.

Is Grupo Mateus losing money?

No. It remains profitable, with first-quarter net income of R$212.9 million (about $38 million), though that was down 21.8% year on year, while revenue rose 12.9% to R$9.4 billion.

Why are same-store sales falling?

Same-store sales dropped 7.3% on food deflation in commodities, higher household debt and a shift toward smaller, cheaper baskets, plus the company’s choice to drop low-margin sales channels.

Where does Grupo Mateus operate?

It is concentrated in Brazil’s north and northeast, running supermarkets, cash-and-carry stores and wholesale across nine states, with the store closures hitting Maranhao, Para, Piaui, Ceara, Sergipe and Bahia.

How did the market react?

Shares rose on news of the layoffs, as investors read the cost discipline and strong cash generation as positives despite the drop in quarterly profit.

Connected Coverage

The restructuring follows the quarterly numbers we detailed when Grupo Mateus reported a 22% profit drop on weak consumer demand. It fits a sector-wide pivot, the same one we covered when Assai slowed its expansion to strengthen its finances. For the bigger picture, see our overview of how Brazil’s supermarket sector grew into a $180 billion market.

Reported by Sofia Gabriela Martinez for The Rio Times — Latin American financial news. Filed May 20, 2026 — 17:30 BRT.