Mexico Retail Report Q4 2012

The Mexico Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Mexico's economic outlook of a weaker external environment weighing on demand for Mexican exports and starting to sap consumer confidence. The report examines how best to maximise returns in the Mexican retail market while minimising investment risk, and also explores the impact of a eurozone crisis or rapid slowdown in Chinese growth on the Mexican 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 Mexican retail sector as they seek to maximise the growth opportunities offered by the local market.

Mexican per capita consumer spending is forecast to increase by a respectable 28% to 2016, compared with a regional growth average of 17%. The country comes second out of seven in BMI's LatAm retail risk/reward ratings, although it underperforms slightly in the 'reward' category. Among all retail categories, over-the-counter pharmaceuticals will be the outperformer through to 2016 in growth terms, with sales expected to rise by 55.2% throughout the forecast period, from US$1.80bn to US$2.79bn.

In the competitive arena, BMI sees upside potential in President Felipe Calderón having signed a decree to amend the regulation of health supplies, which should strengthen Mexico's business environment and encourage domestic industry growth.

Over the last quarter, BMI has revised the following forecasts/views: ? BMI is revising up its 2012 real GDP growth forecast, from 3.4% to 3.8%, as the victory of business-friendly Enrique Peña Nieto bolsters investment. However, in 2013 we expect that Mexico's weaker manufacturing sector will begin to weigh on consumer confidence to the extent that, even with a stronger investment picture, we expect growth will slow to 3.4% (revised up from 3.0% due to the stronger investment outlook).

? After private consumption recorded 5.3% year-on-year (y-o-y) growth in Q112 – the largest expansion since before the start of the 2008/09 global financial crisis – BMI sees potential for some moderation towards the end of 2012 and into 2013. We forecast growth of 4.5% in 2012

Mexico Retail Report Q4 2012 © Business Monitor International Ltd Page 6 and 3.7% in 2013, contributing 3.1 percentage points (pp) and 2.6pp to real GDP growth respectively.

? BMI's forecast for strong private consumption has been reinforced by recent retail sales data, which showed a rise of 1.8% month-on-month (m-o-m) in July. This was above the estimated 0.9% increase in a Reuters poll. Compared with June 2011, sales were up by 5.6%, beating expectations of a rise of 4.13%.

Table of contents

Chapter 1 - BMI Industry View

SWOT Analysis

Mexico Retail Business Environment SWOT

Mexico Political SWOT

Mexico Economic SWOT

Chapter 2 - Market Overview

Current Trends

Key Players

Chapter 3 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Retail Sales Indicators, -

Table: Retail Sales Breakdown By Key Segment, f

Macroeconomic Outlook

Table: GDP By Expenditure, Current Prices Breakdown

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

Mexico's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Risks To Realisation Of Returns

Chapter 6 - Mass Grocery Retail

Mexico Mass Grocery Retail Industry SWOT

Market Overview

Table: Structure Of Mass Grocery Retail Market By Estimated Numbers Of Outlets

Table: Structure Of Mass Grocery Retail Market – Sales Value By Format, - (US$bn)

Table: Structure Of Mass Grocery Retail Market – Sales Value By Format, - (MXNbn)

Table: Average Annual Sales Value By Format ()

Industry Forecast Scenario

Table: Mass Grocery Retail Value Sales By Format

Industry Developments

Chapter 7 - Consumer Electronics

Mexico Consumer Electronics Market SWOT

Market Overview

Mexico Retail Report Q

© Business Monitor International Ltd Page

Computers

Table: PC Sales, -

AV

Table: AV Sales, -

Mobile Handsets

Table: Mobile Communications, -

Industry Forecast Scenario

Consumer Electronics Market

Table: Consumer Electronics Overview, -

Industry Developments

Chapter 8 - Automotives

Mexico Autos Industry SWOT

Industry Forecast Scenario

Sales

Table: Autos Sales By Segment – Historical Data And Forecasts, -

Production

Table: Autos Production By Segment – Historical Data And Forecasts, -

Trade

Table: Autos Trade – Historical Data And Forecasts, -

Economic Contribution

Table: Autos Sector – Historical Data And Forecasts, -

Competitive Landscape

Table: Vehicle Production, -

Table: Vehicle Sales To Dealerships, -

Industry News

Passenger Cars – Forecast & Analysis

Table: Passenger Car Segment – Historical Data And Forecasts, -

New Investments

Jumping On The Electric Car Bandwagon

Chapter 9 - Demographic Outlook

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

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

Table: Mexico's Key Population Ratios, -

Table: Mexico'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: Mexico (in North America), Mexico (in BRICM)