Chile Retail Report Q4 2012

The Chile Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Chile's economic outlook of high labour costs, a moderation in external demand and a fiscally conservative government.

The report examines how best to maximise returns in the Chilean retail market while minimising investment risk, and also explores the impact of a possible rapid slowdown in Chinese growth and a eurozone break-up on the Chilean consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Chilean retail sector, as they seek to maximise the growth opportunities offered by the local market.

Chilean per-capita consumer spending is forecast to increase by a healthy 28% to 2016, compared with a regional growth average of 17%. The country comes sixth (out of seven) in BMI's Latin American Retail Risk/Reward Ratings, although it outperforms significantly for Risk. Among all retail categories, food & drink will be the outperformer through to 2016 in growth terms, with sales forecast to increase from US$25.80bn in 2012 to US$38.79bn by the end of the forecast period, up more than 50%.

In the competitive arena, BMI sees upside potential in the opportunity for mass grocery retail (MGR) retailers to expand beyond Santiago, which should lead to Chile's MGR market becoming an increasingly attractive proposition for multinational companies. Sales at MGR outlets are expected to grow by almost 46% over the period, from US$20.82bn in 2012 to US$30.31bn by 2016.

Over the last quarter, BMI has revised the following forecasts/views: ? BMI remains above consensus on growth in 2012 at 4.8%, noting that Chile saw real GDP pick up in Q112 to 5.6% year-on-year (y-o-y), from 4.5% the previous quarter, thanks to a positive contribution from net exports. However, the precarious external environment means that downside risks are significant and growing.

BMI is sticking with its forecast for household expenditure to grow by 4.5% in real terms in 2012 (down from 8.8% in 2011), before picking up slightly to 6.0% in 2013. Unemployment remained near its lowest level in a decade at 6.5% in April; and, while consumer credit growth slowed, to Chile Retail Report Q4 2012 © Business Monitor International Ltd Page 6 15.8% y-o-y in April from 16.2% the previous month, the rate of expansion is still strong, with nominal levels of consumer loans continuing to hit record highs.

BMI's forecast for relatively strong private consumption has been reinforced by an upward retail sales trend. Latest data from the National Statistics Institute show that Chilean retail sales rose 8.9% y-o-y in June, up from 5.6% in May. Although the solid labour market is driving healthy gains in consumer demand, the sharp increase in retail sales growth was also influenced by the extra two days in June.

Table of contents

Chapter 1 - Executive Summary

SWOT Analysis

Chile Retail Business Environment SWOT

Chile Political SWOT

Chile Economic SWOT

Chapter 2 - Market Overview

Current Trends

Key Players

Chapter 3 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Retail Industry, -

Table: Retail Sales Breakdown By Key Segment, f

Macroeconomic Outlook

Table: Chile – Economic Activity

Chapter 4 - Regional Retail Outlook

Table: Latin America Retail Trends, -

Table: Regional Retail Sales, - (US$bn)

Table: % Of Regional Retail Sales, -

Table: Regional Food Consumption, - (US$bn)

Table: Regional Mass Grocery Retail, - (US$bn)

Regional Retail Trends

Chapter 5 - Risk/Reward Ratings

Table: Latin America Retail Business Environment Ratings

Chile's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 6 - Mass Grocery Retail

Chile Mass Grocery Retail Industry SWOT

Market Overview

Table: Structure of Chile's Mass Grocery Retail Market by Estimated Number of Outlets

Table: Structure of Chile's Mass Grocery Retail Market – Sales by Format (US$bn)

Table: Average Annual Sales Value by Format –

Industry Forecast Scenario

Table: Chile Mass Grocery Retail – Value Sales by Format – Historical Data & Forecasts

Table: Sales Breakdown By Retail Format Type

Industry Developments

Chapter 7 - Consumer Electronics

Chile Consumer Electronics Market SWOT

Market Overview

Computers

Table: PC Sales

Chile Retail Report Q

© Business Monitor International Ltd Page

AV

Table: AV Sales, -

Mobile Handsets

Table: Mobile Communications

Industry Forecast Scenario

Consumer Electronics Market

Table: Consumer Electronics Overview

Industry Developments

Chapter 8 - OTC Pharmaceuticals

Chile Pharmaceuticals And Healthcare Industry SWOT

Market Overview

Industry Forecast Scenario

OTC Medicine Market Forecast

Table: OTC Medicine Sales Indicators -

Table: Forecast

Industry Development

Pharmaceutical Distribution

Pharmaceutical Retail Sector

Chapter 9 - Demographic Outlook

Table: Chile's Population By Age Group, - (')

Table: Chile's Population By Age Group, - (% of total)

Table: Chile's Key Population Ratios, -

Table: Chile's Rural And Urban Population, -

Chapter 10 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Chile (in South America)