Peru Retail Report Q4 2013 - New Study Released

The Peru Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on Peru's economic outlook of sluggish fixed investment growth. The report examines how best to maximise returns in the Peruvian retail market while minimising investment risk, and also explores the impact on the Peruvian consumer of a more aggressive slowdown in economic activity in the US or China than we are currently expecting, and equally the impact such a slowdown would have on the ability of producers and exporters to realise returns in the short term.

Full Report Details at
- http://www.fastmr.com/prod/712815_peru_retail_report_q4_2013.aspx?afid=301

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 33% to 2017, compared with a regional growth average of 27%. Peru comes second (out of seven) in BMI's Latin American Retail Risk/Reward Ratings.

Among all retail categories, mass grocery retail (MGR) will be the outperformer between 2013 and 2017 in growth terms, with sales forecast to increase from US$2.61bn in 2013 to US$3.87bn by the end of the period. Growth in MGR sales is expected to outstrip that of overall food sales (48.4% compared with 47.7%), with MGR's share of the overall food market predicted to remain at 11.3% throughout the forecast period.

However, BMI is forecasting that between 2013 and 2017, sales at Peruvian discount stores will increase by 71.6% to reach US$0.18bn, while sales at supermarkets will increase by 60.6% to reach US$1.46bn.

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

* Peru's economy posted the slowest expansion since 2009 in Q113 due in part to a weak performance by the external sector and moderating fixed investment, bolstering our long-held view for a notable moderation in real GDP growth in the next few years. Indeed, with a slowdown in China to continue hitting Peru's economy through the trade and investment channels in the coming years, we maintain our below-consensus real GDP growth forecasts of 5.4% and 5.0% for 2013 and 2014 respectively.Despite our forecast for a notable slowdown in headline growth in the next few years, we expect that private consumption will remain a relative bright spot for the economy. Indeed, we forecast private consumption to contribute 3.8 percentage points (pp) to real GDP growth in 2013 and 3.4pp in 2014, implying real growth of 5.8% and 5.1% respectively.

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