New Market Report Now Available: Venezuela Retail Report Q2 2014

From: Fast Market Research, Inc.
Published: Mon May 19 2014

Retail markets in Latin America are expanding quickly in light of rapidly increasing disposable income, population growth (especially in urban areas), aspirational purchasing, easier access to credit and the development of a modern retail infrastructure, and although Venezuela is not one of the best opportunities in the region we believe it is no exception to this trend, and has a number of attractive investment opportunities.

The new Venezuelan Retail Report provides an extensive and comprehensive forecast of various retail indicators including household spending, and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts, and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink, healthcare and insurance, consumer electronics, toys, pets, gardens, household goods, and a number of other subsectors.

Full Report Details at

We are forecasting real GDP growth of just 1.5% in 2014, in the face of high inflation and the challenges posed to the business environment by the government. This growth rate is far below the average 6.0% seen over the past decade, as well as our 2013 estimation of 2.0% growth.

The retail sector in Venezuela has benefited from the comparatively high GDP growth rates of the past few years, as proceeds from the windfall oil revenues were redirected into the non-oil economy. Bumper oil receipts and a policy of income redistribution over the review period caused sales at mass grocery retail outlets, for example, to grow quickly. However, we note that would-be entrants will continue to be discouraged by the government policy of expropriating retail developments and the state run retail developments which will continue to challenge private retailers.

Venezuelan residents rely heavily on imports for essential household goods, and we expect a weaker currency to continue to drive average inflation, which reached an estimated 33% in 2013. Moreover, food prices have been particularly sensitive to a weaker bolivar, which we expect will keep social tensions high and continue posing threats to political stability through anti-government demonstrations.

We believe that goods shortages and higher food prices will ensure social tensions remain elevated. Vice President for the Economy Rafael Ramirez announced in late October 2013 that the country would massively boost its imports of food and other basic goods over the next two months to help ease rapidly rising inflation. While Ramirez did not specify which goods would be targeted, the country has seen major shortages of sugar, milk, cooking oil, and toilet paper, among many others. It was not clear how the government would pay for the import push, given that the availability of foreign exchange has declined sharply over recent months.

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