New Retailing research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 08/31/2012 -- The Mexico Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Mexico's economic outlook should businesses continue substantially to run down their inventories.
The report examines how best to maximise returns in the Mexican retail market while minimising investment risk, and also explores the impact of a potential slowdown in the US on the Mexican 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 Mexican retail sector as they seek to maximise the growth opportunities offered by the local market.
Mexican per capita consumer spending is forecast to increase by a respectable 32% to 2016, compared with a regional growth average of 19%. The country comes second out of seven in BMI's LatAm retail risk/reward ratings, although it underperforms slightly in the 'reward' category.
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Among all retail categories, over-the-counter pharmaceuticals will be the outperformer through to 2016 in growth terms, with sales expected to rise by 57.9% throughout the forecast period, from US$1.76bn to US$2.79bn.
In the competitive arena, BMI sees upside potential in President Felipe Calderon having signed a decree to amend the regulation of health supplies, which should strengthen Mexico's business environment and encourage domestic industry growth.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI is maintaining its above-consensus real GDP growth forecast of 3.4% for 2012, and has upgraded its 2013 forecast from 2.7% to 3.0%. Despite Mexico's continued vulnerability to external shocks, BMI believes that economic growth will be bolstered by solid private consumption and robust investment in the coming quarters.
- Following the robust 4.6% expansion in private consumption in 2011, BMI forecasts strong growth of 4.2% in 2012 and 4.0% in 2013. This will be underpinned by several dynamics. First, we expect the peso to maintain a broadly appreciatory trajectory, bolstering Mexicans' purchasing power. Second, consumer credit looks likely to remain robust, having levelled off around 24.0% y-o-y, and is expected to encourage private spending.
- BMI's forecast for strong private consumption has been reinforced by a strong start to 2012 for retail sales, which rose 4.6% y-o-y in January and 7.6% y-o-y in February, before slowing slightly to 4.3% y-o-y in March. In Q112, retail sales rose by an annualised 5.4%.
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