Venezuela Retail Report Q4 2012

The Venezuelan retail report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on Venezuela’s economic outlook of extremely low productive capacity and a potential currency devaluation.

The report examines how best to maximise returns in the Venezuelan retail market while minimising investment risk, and also explores the impact of deteriorating regional credit risk on the Venezuelan 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 used by the leading players in the Venezuelan retail sector, as they seek to maximise the growth opportunities offered by the local market.

Venezuelan per-capita consumer spending is forecast to decrease by an alarming 38% to 2016, compared with a regional growth average of 17%. The country comes fifth (out of seven) in BMI’s Latin American retail risk/reward ratings, although it underperforms significantly for risk.

Among all retail categories, consumer electronics will be one of the strongest performers through to 2016 in growth terms, with sales forecast to increase from US$3.82bn in 2012 to US$4.47bn by 2016, a rise of 16.7%.

In the competitive arena, BMI sees upside potential in government programmes that provide new financing options for consumers. Venezuela is not one of the largest markets in the region, but the low household penetration of many products suggests there is latent growth potential. The market offers continued growth potential in key digital products groups such as computers (less than 15% penetration), notebook computers and LCD television sets.

Over the last quarter, BMI has revised the following forecasts/views:

BMI is revising up its 2012 real GDP forecast for Venezuela from 2.5% to 3.5% on the back of a very strong Q112 real GDP reading of 5.9%. Despite this revision, we believe the country's growth model faces serious challenges down the road, informing our 2013 real GDP forecast of 2.2%.

BMI believes the current elevated levels of private consumption in Venezuela, which have been a major driver of growth since 2011, are starting to face significant pressures from a deterioration in credit and currency conditions, and are unlikely to be sustained beyond the October presidential elections.

BMI’s forecast for slowing private consumption beyond the October 2012 presidential election is likely to mean that the current acceleration in retail sales is unsustainable. The central bank’s retail sales index (by volume) grew 15.3% y-o-y in June 2012 amid a boom in domestic demand fuelled by government spending.

Table of contents

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Venezuela Retail Business Environment SWOT

Venezuela Political SWOT

Venezuela Economic SWOT

Chapter 3 - Market Overview

Current Trends

Key Players

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Venezuela Retail Sales Indicators, -

Table: Retail Sales Breakdown By Key Segments, f

Organised Retail

Macroeconomic Outlook

Table: Venezuela – Economic Activity, -

Chapter 5 - 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 6 - Risk/Reward Ratings

Table: Latin America Retail Business Environment Ratings

Venezuela’s Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 7 - Mass Grocery Retail

Venezuela Mass Grocery Retail Industry SWOT

Market Overview

Table: Structure Of Mass Grocery Retail Market – Estimated Number Of Outlets

Table: Structure Of Venezuela’s Mass Grocery Retail Market – Sales Value By Format (US$bn)

Table: Average Annual Value Sales By Unit Per Format ()

Industry Forecast Scenario

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

Table: Sales Breakdown By Retail Format Type

Industry Developments

Chapter 8 - Consumer Electronics

Venezuela Consumer Electronics Market SWOT

Market Overview

Computers

Table: PC Sales, -

AV Devices

Table: AV Sales, -

Mobile Handsets

Table: Mobile Communications,-

Industry Forecast Scenario

Consumer Electronics Market

Table: Consumer Electronics Overview, - (US$mn)

Industry Developments

Chapter 9 - Automotives

Venezuela Autos Industry SWOT

Industry Forecast Scenario

Sales

Table: Venezuela Autos Sales, -

Production

Table: Venezuela Autos Production, -

Trade

Table: Venezuela Autos Trade, -

Table: Venezuela Car Ownership Rate, -

Passenger Cars

Table: Venezuela Passenger Car Segment, -

Company News

Chapter 10 - Demographic Outlook

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

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

Table: Venezuela's Key Population Ratios, -

Table: Venezuela's Rural And Urban Population, -

Chapter 11 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Venezuela (in South America)