Fast Market Research recommends "Argentina Retail Report Q1 2014" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 12/23/2013 -- Retail markets are expanding quickly in light of rapidly increasing disposable income, population growth (especially in urban areas), aspirational purchasing, easier access to credit and the development of a modern retail infrastructure. We believe that all of these factors will encourage a pronounced rise in household spending, particularly in luxury statement items and non-essentials such as clothing, household appliances and furnishings, and personal care.
The new Argentina retail report provides an extensive and comprehensive forecast of various retail indicators including household spending, and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts, and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink, healthcare and insurance, consumer electronics, toys, pets, gardens, household goods, and a number of other subsectors.
An expanding population, the rise in disposable income and a taste for luxury items are key factors behind the forecast growth in Argentina's retail sales. Other positive factors such as the availability of consumer credit are likely to see the value of the retail segment increase from ARS76.17bn (US$24.08bn) in 2013 to ARS90.08bn (US$28.48bn) by 2017, a rise of 18.3%.
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Latest data show that retail sales in Argentina increased 19.70% y-o-y in July 2013. Month on month, the July increase was a seasonally adjusted 27.7%, up from 30.2% in June, whose figure was revised up from 26.2%.
However, we do note some drawbacks for potential investors in the Argentine retail sector. Caution about the underlying strength of the Argentine economy helps explain why the country's retail sector has not been the target of greater investment, despite the very high growth rates currently on offer.
Moreover, in February 2013, in an effort to rein in inflation, President Cristina Fernandez de Kirchner's administration froze supermarket prices for 60 days, which was later extended to four months. On June 1, the prices of 500 goods, ranging from cooking oil to sodas, cereals, wines, hair, beer and toiletries, were frozen. Factors such as these can deter would-be entrants.
While many are still attracted by the lucrative opportunities presented by Argentina's rising household expenditures, drawbacks are undeniable. For example, the rapid sales growth prompted Carrefour and US- based Walmart to focus significant resources in Argentina. However, these investments have generally been lower than what might have been expected, emphasising that multinational retailers remain sceptical as to whether the pace of expansion was sustainable.
Key BMI forecasts include:
- We expect total household spending to be US$267bn over 2013.
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