Peru Retail Report Q4 2012

The Peru Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Peru's economic outlook of sluggish growth in net exports. The report examines how best to maximise returns in the Peruvian retail market while minimising investment risk, and also explores the impact of a potential slowdown in China or a Greek exit from the eurozone on the Peruvian 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 Peruvian retail sector, as they seek to maximise the growth opportunities offered by the local market.

Peruvian per capita consumer spending is forecast to increase by 27% to 2016, compared with a regional growth average of 17%. The country comes third (out of seven) in BMI's Latin American Retail Risk/Reward Ratings, although it outperforms slightly for Reward.

Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 in growth terms, with sales forecast to increase from US$2.34bn in 2012 to US$3.31bn by the end of the period. Growth in MGR sales is expected to outstrip that of overall food sales (41% compared with 40%), with MGR's share of the overall food market predicted to grow from 11.2% in 2012 to 11.3% by 2016. Over the next five years, expansion by the leading operators and market entry by new players is expected to result in dynamic growth in the MGR sector. As such, BMI is forecasting that between 2012 and 2016 sales at Peruvian hypermarkets will increase by 23.9% to reach US$1.28bn, while sales at supermarkets will increase by 54.3% to reach US$1.41bn.

Over the last quarter, BMI has revised the following forecasts/views: ? BMI maintains its below-consensus 4.8% real GDP growth forecast for 2012 and 2013. Despite a very strong real GDP growth reading of 6.0% y-o-y in Q112, we are happy to maintain our end-2012 growth forecast given Peru's substantial exposure to a slowdown in China. ? BMI expects private consumption to remain the primary driver of growth over the coming years, contributing 4.0 percentage points (pp) and 3.3pp to GDP in 2012 and 2013 respectively, a slight moderation from the 4.2pp contribution in 2011. While credit growth has moderated somewhat from its 2011 highs, it remains relatively strong, coming in at 13.7% y-o-y in April. ? BMI's forecast for strong private consumption has been reinforced by the fact that the retail sector expanded by 7.2% in the first half of 2012.

Table of contents

Chapter 1 - SWOT Analysis

Peru Retail Business Environment SWOT

Peru Political SWOT

Peru Economic SWOT

Chapter 2 - Market Overview

Current Trends

Key Players

Chapter 3 - Industry Forecast Scenario

Consumer Outlook

Macroeconomic Outlook

Table: Peru – 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

Peru's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 6 - Consumer Electronics

Peru Consumer Electronics Market SWOT

Market Overview

Computers

Table: PC Sales

AV Devices

Table: AV Sales,-

Mobile Handsets

Table: Mobile Communications

Industry Forecast Scenario

Table: Consumer Electronics Overview

Government Authority

Industry Developments

Chapter 7 - OTC Pharmaceuticals

Peru Pharmaceuticals And Healthcare Industry SWOT

Market Overview

Industry Forecast Scenario

OTC Medicine Market Forecast

Table: OTC Medicine Sales Indicators -

Competitive Landscape

Peru Retail Report Q

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Pharmaceutical Distribution And Retail

Chapter 8 - Demographic Outlook

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

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

Table: Peru's Key Population Ratios, -

Table: Peru's Rural And Urban Population, -

Chapter 9 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Peru (in South America)