New Retailing research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 08/16/2012 -- The Brazilian Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on Brazil's economic outlook of structural economic imbalances. The report examines how best to maximise returns in the Brazilian retail market while minimising investment risk, and also explores the impact of deteriorating regional credit risk on the Brazilian consumer and on the ability of producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading players in the Brazilian retail sector, as they seek to maximise the growth opportunities offered by the local market.
Brazilian per capita consumer spending is forecast to increase by a modest 13% to 2016, compared with a regional growth average of 19%. The country comes first in BMI's LatAm Retail Risk/Reward Ratings, although it underperforms slightly for Risk.
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Among all retail categories, Mass Grocery Retail (MGR) will be the outperformer through to 2016 in growth terms, with sales forecast to increase by nearly 62% between 2012 and 2016, from US$97.44bn to US$157.47bn. Hypermarkets and supermarkets have gradually taken market share from traditional stores in recent years, with the latter accounting for more than 62% of MGR sales in 2012.
In the competitive arena, BMI sees upside potential in the Growth Acceleration Programme, aimed at increasing infrastructure-related investment via tax incentives and large public and private investments. The planned measures, if successful, could ease retailers' logistical problems, which are mainly caused by poor road networks in many parts of the country.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI remains above consensus on growth in 2012 at 3.9%. Two main dynamics support our aboveconsensus view: the authorities' desire to support consumption and growth through continued fiscal and monetary stimulus; and a robust fixed investment outlook for the country. We remain below consensus on growth in 2013 at 3.7%.
- BMI believes private consumption will remain relatively strong in 2012 on the back of continuing fiscal and monetary stimulus, adding 2.0 percentage points (pp) to GDP. This is supported by 275 basis points (bps) of cuts in the Selic rate since August 2011, and our forecast for an additional 100bps of cuts by year end, as the central bank has signalled that it is willing to accept modestly higher inflation in order to bring down Brazil's restrictively high interest rates.
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