Economic Ratings: Retailers Putting On Weight

May 2008 | Risk Summary

With robust consumer spending boosted by low unemployment, inflation-beating wage growth and a rise in consumer credit, together with a growing population, BMI is forecasting 58% growth in the mass grocery retailers (MGR) market by 2012. In 2007, members of retailers association, ANTAD, invested US$2.56bn opening new stores and remodelling old ones, investment which increased sales floor space by around 10%. Despite the slowdown in same-store growth, ANTAD members plan to invest a further US$3bn in 2008 to increase floor space by a further 11%. This increase in store numbers will inevitably have some cannibalisation effect on existing stores and can be held partly responsible for the slowdown in same-store growth. Including new stores, total sales of its members increased by 9.6% in 2007. This indicates that retailers can counter this same-store growth slowdown through further expansion, and that overall Mexicans are continuing to embrace organised retail.

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