"Argentina Retail Report Q3 2016" Published

Argentina's economic activity and household consumption will contract sharply in 2016 due to high inflation and the de fl ation of the country's currency. This will particularly hamper demand for imported goods and non-essential purchases. Nonetheless, we believe that the retail market will pick up markedly from 2017 onward s , benefiting from returning investor confidence and an improving labour market.

Key Views And Developments

Total household spending in USD terms will experience a decline of 26.4% in 2016 due to deflation of the Argentinean peso. While in local currency terms household spending will increase by 21.6%, the gains will be wiped out by high inflation levels, forecast at 34.6% in 2016.

Essentials will continue to dominate overall household budgets, accounting for 65.5% of the total spending by 2020. Food and non-alcoholic drinks will remain the largest spending category, accounting for around 24.6% of total household spending across our forecast period.

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Alcoholic drinks & tobacco is the largest spending category within non-essentials. We believe it will enjoy the strongest sales growth rate across the industry over 2016-2020.

Argentina's e-commerce agency CACE reported that the country's e-commerce sector experienced 70.8% year-on-year (y-o-y) growth in 2015, reaching a total value of ARS68.5bn. The agency expects the expansion to continue, projecting a 64% y-o-y increase in 2016.

In April 2016, the leading real estate firm in Argentina, IRSA, announced that it would invest SUD460mn into the construction of new shopping malls, offices and residential housing in Argentina. Among the projects, IRSA will build a new shopping mall in the Saavedra neighbourhood of Buenos Aires city and renew the Alto Palermo shopping mall.

The Argentina 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 Argentina 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 Argentina to test other views - a key input for successful budgeting and strategic business planning in the Argentinian retail market.
Target business opportunities and risks in Argentina through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Coverage

BMI Industry View

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