Mexico Retail Report Q4 2016

Date: July 27, 2016
Pages: 64
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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Includes 3 FREE quarterly updates

BMI View: Mexico's retail market is expected to prove the regional outperformer in the short-to-medium term, with positive economic and labour trends supporting healthy growth in household income rates, which in turn will boost spending in a number of retail segments. The country is attracting a high level of international investor interest and we expect to see a large number of new retail units opening over the coming months, including the introduction of major international fashion and electronics brands to the market - reflecting growing consumer demand for non-essential and higher value items as disposable income rates rise. While some risk to investors does stem from ongoing security concerns and a reliance upon the health of the US economy, overall Mexico's retail market is expected to grow and diversify rapidly and as such presents a valuable opportunity for a range of retailers.

Key Views & Developments
  • Strong growth in labour-intensive sectors such as manufacturing and construction will lead to higher employment rates in Mexico, which will provide a valuable boost to average household income rates when measured in local currency terms in 2016, though we note currency movements will lead to a shortterm contraction in average household income when measured in US dollar terms, reflecting the ongoing weakness of the Mexican peso.
  • Higher household income rates combined with improving access to credit and low inflation will in turn support robust growth in total household spending in 2016, again when measured in local currency terms, with total household spending reaching some MXN5,646bn (USD319bn). Banco de México (Banxico) is expected to hold the benchmark overnight interest rate at 3.75% when it meets in late June, supporting our current forecasts.
  • A number of high profile retailers have announced plans to expand in the Mexican market. Luxury brand Dior opened its first store in the country in early 2016 following Bottega Veneta, Bulgari, TAG Heuer and Rolex, which have also entered the market. Swedish brand Make Up Store has also opened a new store in Mexico City, alongside other Swedish brand H&M, which has expanded rapidly in Mexico.
  • Further reflecting the expected growth in the Mexican retail segment, Walmart Mexico announced in May 2016 it plans to open over 1,000 new stores in Mexico and the wider Central America region over the next ten years.
BMI Industry View
Industry Forecast
Headline Retail Forecast
  Table: Total Household Spending (Mexico 2013-2020)
  Table: Retail Sector Spending, % Of Total (Mexico 2013-2020)
  Table: Retail Sector Spending, % of GDP (Mexico 2013-2020)
  Table: Headline Retail Sector Spending (Mexico 2013-2020)
Retail Sector Forecast
Food, Drink & Tobacco
  Table: Food, Drink & Tobacco Spending (Mexico 2013-2020)
Clothing & Footwear
  Table: Clothing & Footwear Spending (Mexico 2013-2020)
Household Goods
  Table: Household Goods Spending (Mexico 2013-2020)
Personal Care & Effects
  Table: Personal Care Spending (Mexico 2013-2020)
Household Numbers And Income Forecast
  Table: Household Income Data (Mexico 2013-2020)
  Table: Labour Market Data (Mexico 2013-2020)
Demographic Forecast
  Table: Total Population (Mexico 2013-2020)
  Table: Population: Babies (Mexico 2013-2020)
  Table: Population: Young Children (Mexico 2013-2020)
  Table: Population: Children (Mexico 2013-2020)
  Table: Population: Young Teens and Older Children (Mexico 2013-2020)
  Table: Population: Young People (Mexico 2013-2020)
  Table: Population: Older Teenagers (Mexico 2013-2020)
  Table: Population: 21yrs + (Mexico 2013-2020)
  Table: Population: Young Adults (Mexico 2013-2020)
  Table: Population: Middle Aged (Mexico 2013-2020)
  Table: Population: Urban (Mexico 2013-2020)
Industry Risk/Reward Index
Latin America And The Caribbean Risk/Reward Index
  Table: Latin America And The Caribbean Retail Risk/Reward Index, Q416
Mexico Risk/Reward Index
Market Overview
Competitive Landscape
Clothing & Footwear
  Table: Selected Clothing And Footwear Retailers
Household Goods
  Table: Selected Household Goods Retailers
  Table: Selected Electronics Retailers
Department Stores
  Table: Selected Department Stores
  Table: Selected E-commerce Retailers
Pharmacies And Drug Stores
  Table: Selected Pharmacies and Drug Store
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Retail Risk/Reward Index Indicators
  Table: Weighting Of Indicators
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