Mexico Retail Report

 Published On: Jul, 2016 |    No of Pages: 64 |  Published By: BMI Retail | Format: PDF
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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 . 7
SWOT 9
Industry Forecast 11
Headline Retail Forecast . 11
Table: Total Household Spending (Mexico 2013-2020) 14
Table: Retail Sector Spending, % Of Total (Mexico 2013-2020) . . . 15
Table: Retail Sector Spending, % of GDP (Mexico 2013-2020) . . . 16
Table: Headline Retail Sector Spending (Mexico 2013-2020) . 17
Retail Sector Forecast ..... 19
Food, Drink & Tobacco . 20
Table: Food, Drink & Tobacco Spending (Mexico 2013-2020) 21
Clothing & Footwear ..... 21
Table: Clothing & Footwear Spending (Mexico 2013-2020) . . 22
Household Goods .......... 22
Table: Household Goods Spending (Mexico 2013-2020) . . 23
Personal Care & Effects . 23
Table: Personal Care Spending (Mexico 2013-2020) . . 24
Household Numbers And Income Forecast 25
Table: Household Income Data (Mexico 2013-2020) . . 27
Table: Labour Market Data (Mexico 2013-2020) . . 29
Demographic Forecast .... 30
Table: Total Population (Mexico 2013-2020) . . 32
Table: Population: Babies (Mexico 2013-2020) 32
Table: Population: Young Children (Mexico 2013-2020) . . 33
Table: Population: Children (Mexico 2013-2020) . 33
Table: Population: Young Teens and Older Children (Mexico 2013-2020) . . . 33
Table: Population: Young People (Mexico 2013-2020) 34
Table: Population: Older Teenagers (Mexico 2013-2020) . 34
Table: Population: 21yrs + (Mexico 2013-2020) . . 35
Table: Population: Young Adults (Mexico 2013-2020) 35
Table: Population: Middle Aged (Mexico 2013-2020) . 36
Table: Population: Urban (Mexico 2013-2020) 36
Industry Risk/Reward Index ..... 37
Latin America And The Caribbean Risk/Reward Index ....... 37
Table: Latin America And The Caribbean Retail Risk/Reward Index, Q416 . . 37
Mexico Risk/Reward Index .......... 38
Rewards 38
Risks ..... 39
Market Overview . 41
Competitive Landscape . 47
Clothing & Footwear ..... 47
Table: Selected Clothing And Footwear Retailers . . 47
Household Goods .......... 48
Table: Selected Household Goods Retailers 48
Electronics ....... 48
Table: Selected Electronics Retailers . . . 48
Department Stores ......... 49
Table: Selected Department Stores . 49
E-Commerce ..... 49
Table: Selected E-commerce Retailers . 49
Pharmacies And Drug Stores ...... 50
Table: Selected Pharmacies and Drug Store . . . 50
Glossary .... 51
Methodology ........ 58
Industry Forecast Methodology .. 58
Sources . 61
Risk/Reward Index Methodology . 61
Table: Retail Risk/Reward Index Indicators 62
Table: Weighting Of Indicators . 64
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