Colombia Retail Report Q2 2016 - New Market Study Published

Economic headwinds facing Colombia will extend into 2016 as low commodity prices, struggling emerging markets and weak peso are hurting households and retailers in the country. High inflation will likely force some consumers to delay large purchases until at least 2017, as non-essentials retail will slow down this year. However, the economic growth will persist and macroeconomic environment for retailers will likely improve after 2016.

Key Views And Developments

Ripley, a Chilean retailer, and one of the two largest department store chains in Colombia, has announced that it would be leaving the country after accumulating USD27mn in losses in 2014 alone due to unexpected macroeconomic shifts. The firm operated six stores in Colombia.

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Grupo Uribe, one of the major franchise operators in Colombia, closed all of its 12 Mango stores in the country quoting allegedly unfair competition as the reason for exit.

In response to growing inflationary pressure, Colombia's central bank raised the benchmark interest rate by 25 basis points to 6.25% in February. The tightening comes after the decline of peso prompted prices to rise.

Weak peso will continue to have a commanding effect on total household spending in 2016 as the figure is projected to decline by 3.1% in dollar terms. In terms of local currency, nominal increase in household expenditures will rise by 8.0% this year.

Improved economy will lay foundations for decline in unemployment and rise in household incomes as the number of households in the USD10,000+ income bracket expands by 15.4% annually on average.

The Colombia Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's Colombia Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits
Benchmark BMI's independent retail industry forecasts for Colombia to test other views - a key input for successful budgeting and strategic business planning in the Colombian retail market.
Target business opportunities and risks in Colombia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.

Industry SWOT Analysis

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