New Market Report: Argentina Retail Report Q2 2014

From: Fast Market Research, Inc.
Published: Mon Mar 17 2014

Argentina's retail market will experience intermediate growth over BMI's forecast period to 2018, but is not overly attractive to potential investors, due to high inflation (currently standing at around 30%), price freezes on supermarket goods and a significant amount of the population sitting below the poverty line. However, the number of households sitting in the middle-income bracket of US$10,000+ is set to rise steadily, with almost the entire population situated in urban areas, thereby exposing them to more areas of the retail sector.

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.

Full Report Details at

A 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 over the period, with the largest annual increase to come from alcoholic drinks % tobacco (8.7%) education, clothing & footwear (7.9% each). Food & non-alcoholic drinks, transport and housing & utilities will hold the highest percentage shares of the retail market by 2018, although this is subject to change, due to price freezes implemented by President Cristina Fernandez de Kirchner on supermarket goods, a move that has been implemented to help struggling households afford essential goods. Recreation spending, however, will take a hit, only growing by an average of 4.9% per annum. Spending on toys, sports, garden and pets, will be the worst affected, registering an annual decline of 7.6%, as people choose to avoid paying for vets bills and expensive leisure activities.

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 growth rates expected over the next few years.

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 USbased 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:

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