Brazil and Mexico, the Latin paradise for retail businesses

CITY OF MEXICO (Expansion) –

In the next five years, the annual growth of sales of the distribution chains in Latin America will be 3%, but in Mexico and Brazil, the increase will be higher, thanks to the strategies of the chains to adapt their economic models to the economic conditions of these countries.

Thus, sales of the sector in Brazil will increase by 6%, according to a study by JP Morgan. In 2017, the South American country recorded months of food deflation – a general price depression due to oversupply – which put pressure on retailers' sales and profit margins.

All in one jalón & # 39 ;, the other store businesses

To deal with the situation, companies like Carrerour and CBD "focused on personalized discounts, instead of a price war, "says the financial institution's document. In addition, negative trends will disappear by the end of the year. "Food inflation is expected to increase in the second quarter of 2018, which could boost same-store sales (sales in units with more than one year of activity)," say JP analysts Morgan. [19659006] In Mexico, the sector will grow by more than 3% a year and Walmart is one of the companies with the best performance expected. One of the main risks facing the sector is the renegotiation of the Free Trade Agreement which would otherwise increase the price of imported products, which would have a negative impact on inflation. , according to Oxford Economic analysts. All of this, ultimately, can bring down consumption.

"But we continue to see growth opportunities in Mexico, particularly among players who are exploring the consumption of lower social classes," says JP Morgan, who expects Walmart to continue to lead the industry. growing more than the competition.

We also read: The & # 39; mini & # 39; formats, fashion supermarkets

In 2016, Walmart started an expansion plan whose goal is to double its size in 10 years. To achieve this, Guilherme Loureiro, General Manager of Walmart de México y Centroamérica, said in a presentation that he was aiming for annual growth of 3% in new stores, 3% in comparable stores and 1% in new stores. e-commerce.

and in 2017, the company exceeded its goals, and now it continues to promote the online channel of all formats and continue the expansion of its stores, especially those of smaller format, such as Bodegas Aurrera Express.