The traditional channel grew 8.2% in Mexico while supermarkets lost more than 20% in units — and what that means for your distribution strategy in 2026
- 6 days ago
- 6 min read
In the last quarter of 2024, something many sales directors hadn't anticipated in their projections quietly unfolded: supermarket chains in Mexico experienced a year-over-year decline of more than 20% in units sold. At the same time, the traditional retail channel registered annual growth of 8.2%, with sales exceeding 1.982 billion pesos, according to data from NielsenIQ Mexico.
Eduardo Ragasol, general director of NielsenIQ Mexico, was direct in his interpretation:
"The traditional channel is, now more than ever, essential to understanding how Mexicans consume. Its proximity, frequency, and diversity make it a strategic point for any brand seeking real growth in 2026."
For mass-market manufacturers who have been prioritizing their resources in the modern channel for years, these numbers are a sign that should not be ignored.
Why traditional channels are winning while modern channels are losing in Mexico in 2026
The short answer is economic. 70% of Mexican consumers have been changing their purchasing habits around prices due to inflationary pressures, and 84% are worried about their finances, according to EY Mexico. When household budgets are tight, purchasing behavior changes predictably: more frequent visits, smaller shopping baskets, and a preference for the nearest store.
This structurally favors the traditional channel. The corner store doesn't compete with the supermarket in terms of selection or experience. It competes in proximity, frequency of visits, and the ability to sell in smaller packages at prices consumers can afford today.
The data confirms this trend. Consumers are prioritizing essential goods, and purchase frequency in modern retail channels is falling, while traditional channels are capturing daily shopping trips and immediate replenishment needs. These are precisely the fastest-moving categories for consumer goods manufacturers.
What the data says about which categories are winning
Not all categories benefit equally from this trend. Soft drinks, snacks, beer, cookies, and white milk represent more than 70% of the total value of the traditional retail channel in Mexico. 61% of the value growth within the channel comes from snacks and 21% from cookies, driven primarily by small and medium-sized packages that facilitate access to lower prices, according to the NielsenIQ report from March 2026.
There is an additional piece of information that deserves special attention. In the case of cigars, the traditional channel has capitalized on the growth of the Low and Ultra Low segments, which represent 50% of the category's value growth. The pattern is consistent: the traditional channel is capturing growth in the most accessible price segments, in the smallest presentations, and in the most frequently purchased categories.
For a sales director, this has a direct implication. The product assortment that works in the supermarket isn't the same as what should be in the corner store. Manufacturers who haven't differentiated their portfolio architecture by channel are leaving money on the table or, worse, losing market share to competitors who have.
The wholesale channel as an invisible infrastructure of the traditional channel
There is one part of the distribution system that is frequently underestimated in business analyses: the wholesale channel. According to the ISCAM report published in March 2026, the wholesale channel represents approximately 1.5% of the national GDP, distributes nearly 80% of the goods that reach the corner store, and serves more than 600,000 traditional points of sale.
This means that for most manufacturers, the effectiveness of their traditional channel strategy depends heavily on how well their wholesale distribution model is performing. It's a link that, in many cases, is managed less rigorously than the direct relationship with supermarket chains, and this neglect comes at a cost that rarely appears in the monthly sales report.
Routes, salespeople, and retail outlets represent 55.1% of the wholesale channel, primarily serving traditional stores, while direct sales to traditional stores make up 18.8% of the channel, according to ANAM data. Accurately determining what portion of distribution to the traditional channel arrives via wholesale and what portion via direct sales is the starting point for any serious Route to Market analysis.
Three concrete implications for the distribution strategy in 2026
The data from NielsenIQ and ISCAM is not just a market overview. It's a decision-making agenda for any sales director or CEO of a consumer goods manufacturer who wants to close 2026 with better numbers than 2025.
First implication: review the success story by store type
If your team's vision of success in the field was designed more than two years ago, it probably doesn't reflect the reality of the product assortment that the traditional channel can and should offer today. The growth in snacks and cookies in smaller packages, and the increasing importance of affordable soft drinks and cigarettes, should be reflected in what customers expect to find in a well-executed store for each segment.
An outdated success story isn't just an execution problem. It's a profitability problem: the sales team and distributors are pushing the wrong assortment onto the wrong shelf, and no one is measuring it because the standard was never reviewed.
Second implication: evaluate coverage density by region
In regions like the Bajío, Chiapas, and northern Veracruz, the percentage of sales through traditional channels exceeds 70%, according to Kantar LATAM. For a manufacturer with a national presence, this means that the same coverage model does not have the same impact in all regions. A route designed for the Mexico City market is not necessarily the right one for the Bajío or the Southeast.
The manufacturer that is gaining ground in the traditional channel in 2026 does not have a uniform national strategy. It has a differentiated strategy by region, allocating more resources to greater coverage and assortment depth in areas where the traditional channel accounts for a larger share of actual consumption.
Third implication: review the distributor incentive model
In 2025, the wholesale channel saw growth of 3.7% in value and only 0.5% in volume, reflecting a market driven more by price than by actual demand, according to ISCAM. In this environment, distributors are under margin pressure, and a distributor under margin pressure will do what is most profitable, not necessarily what the manufacturer needs.
If the distributor incentive model is based solely on volume or declared coverage, rather than actual sales performance at the point of sale, the manufacturer is paying for results it cannot verify. Reviewing this incentive structure and linking it to verifiable performance metrics in the field is one of the most impactful interventions for profitability in managing a distribution model.
What TMC has seen in the field
We have been working with consumer goods manufacturers in Mexico for over 30 years on Route to Market, Perfect Store, and distributor development projects. What the NielsenIQ and ISCAM data are confirming for 2026 is not a surprise. It is the continuation of a trend that has been consolidating in the traditional Mexican channel for years.
What is consistently surprising is how many manufacturers continue to enter the field with an outdated success story, a hedging model designed for a market from five years ago, and an incentive system that rewards volume but not execution. In a year that ISCAM describes as "defensive," that combination is especially costly.
The manufacturers poised to gain market share in traditional retail channels in Mexico by 2026 are not necessarily those with the largest trade marketing budgets. They are the ones with the best model: the right assortment, in the right store, with the right distributor executing correctly.
Is your distribution model capturing the growth of the traditional channel?
If the answer isn't clear, the first step is a diagnosis. At TMC, we conduct a Route to Market diagnosis in two weeks, providing concrete deliverables on profitability per route, coverage effectiveness, and execution quality at the point of sale.
If you manage the commercial strategy of a mass consumer goods manufacturer in Mexico and the numbers aren't reflecting the growth that the traditional channel is generating, this is the right conversation.
Schedule your diagnostic call here — 30 minutes, free of charge
Sources consulted
NielsenIQ Mexico. "The traditional channel leads consumption in Mexico." The Logistics World, March 2026. thelogisticsworld.com
ISCAM. "Keys to the wholesale channel facing a defensive 2026." T21, March 2026. t21.com.mx
ANAM / LogistixNews. "The weight of the wholesale channel in the distribution of mass consumer products." LogistixNews, January 2025. logistixnews.com
Kantar LATAM. "The traditional channel is reborn: what large consumer goods companies must understand before planning for 2026." TMC Consultores Blog, March 2026.tmcconsultores.com
EY Mexico. "Three consumer trends in Mexico." Cited in Xepelin, 2026. xepelin.com
Kantar Worldpanel. "Growth Drivers in Mexican Consumption 2025." Kantar Latin America, 2025. kantar.com
Alana Capital. "New consumer trends in Mexico for the second half of 2025." Alana Capital, June 2025. alanacapital.com
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