Now Available: Peru Retail Report Q3 2013

From: Fast Market Research, Inc.
Published: Fri Sep 06 2013

The Peru Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on Peru's economic outlook of possible substantial cuts to capital expenditure plans. The report examines how best to maximise returns in the Peruvian retail market while minimising investment risk, and also explores the impact on the Peruvian consumer of a more aggressive slowdown in economic activity in the US or China than we are currently expecting, and equally the impact such a slowdown would have on the ability of producers and exporters to realise returns in the short term.

Full Report Details at

The report also analyses the growth and risk management strategies being employed by the leading players in the Peruvian retail sector, as they seek to maximise the growth opportunities offered by the local market. Peruvian per capita consumer spending is forecast to increase by 33% to 2017, compared with a regional growth average of 27%. Peru comes second (out of seven) in BMI's Latin American Retail Risk/Reward Ratings.

Among all retail categories, mass grocery retail (MGR) will be the outperformer between 2013 and 2017 in growth terms, with sales forecast to increase from US$2.61bn in 2013 to US$3.87bn by the end of the period. Growth in MGR sales is expected to outstrip that of overall food sales (48.4% compared with 47.7%), with MGR's share of the overall food market predicted to remain at 11.3% throughout the forecast period.

However, BMI is forecasting that between 2013 and 2017, sales at Peruvian discount stores will increase by 71.6% to reach US$0.18bn, while sales at supermarkets will increase by 60.6% to reach US$1.46bn.

Over the last quarter, BMI has revised the following forecasts/views:

* Following robust real GDP growth of 6.3% in 2012, we forecast growth in Peru to slow to 5.4% in 2013. Moreover, we anticipate a continued moderation in growth to 4.9% in 2014 as the rebalancing in China takes hold, continuing to impact the Peruvian economy through the trade and investment channels. Despite relatively strong headline growth in 2012, private consumption moderated slightly last year, contributing 3.9 percentage points (pp) to real GDP growth, down from 4.2pp in 2011. We expect this downward trend to continue in 2013, forecasting private consumption to contribute 3.8pp to headline growth, implying real growth of 5.7%. This is underpinned by our view that modest currency weakness will weigh on consumers' purchasing power, while recent increases in banks' reserve requirements will cap credit growth.

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Company: Fast Market Research, Inc.
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