Retailing holds up despite slowing economy
In 2012, retailing experienced a slowdown in growth compared with the good performance posted in 2011. The slowing performance was the result of declining consumer confidence in the face of troubles in European countries such as Greece and Spain, and disappointing economic growth. Although slowing, retail sales continued to grow, and retailers showed their optimism in future growth by investing in outlet expansion and mergers and acquisitions.
Increasing internet retailing competition demands new services
Internet retailing continued to register strong growth in 2012. The strong performance has convinced a number of new players to enter and competition is heating up. The trend has been good for consumers as it has forced companies to offer better services in order to encourage loyalty. Onofre Eletro has tried to take the quality of service to a new level by offering four-hour delivery to consumers in the São Paulo area. Online apparel retailers are also trying to improve their presence by offering better return policies and guaranteeing customer satisfaction. This improved service not only benefits internet retailing, but could increasingly threaten some store-based retailing.
Internet retailing starts to recover from logistical problems
Internet retailing’s growth has been extremely positive, but some companies were caught off guard by the increasing strain on logistics, warehousing and transport. Among the companies that were unable to keep up with booming demand in 2011 was B2W Cia Global Do Varejo, which ended up receiving a huge number of customer complaints due to long delays in delivery. In 2012, however, things started to look up as companies invested in improved distribution and delivery methods. They also reviewed policies in order to ensure more realistic delivery dates for consumers outside of major metropolitan areas, and were partially able to recover from the bad experience in 2011.
Retailing industry continues to consolidate
The rush to make mergers and acquisitions continued apace in 2012 as companies sought to improve their reach across regions and increase quickly. Parapharmacies/drugstores saw the merger between Drogarias Pacheco and Drogaria São Paulo, which are still operating separately. In electronics appliances specialist retailers, Máquina de Vendas continued with its acquisition growth strategy by acquiring Lojas Salfer in the south of Brazil. While acquisition continues to be a strong strategy, mergers and acquisitions are expected to slow down over the forecast period as the number of attractive targets diminishes.
The forecast is still positive for retailing
Following the same path as 2012, 2013 is not expected to be an excellent year for retailing given the current poor performance of GDP that is likely to continue as the situation in Europe continues to be poor. However, companies continue to be optimistic about future growth, with the Football World Cup in 2014 and the Olympic Games in 2016 likely to boost growth and usher in a healthier economic trajectory. As a result, some retailers are still investing in expansion, opening new outlets and increasing the selling space of their stores. International companies like H&M remain interested in entering Brazil given solid prospects compared with those seen in developing countries.
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The Retailing in Brazil market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic number of stores, selling space and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- How big is the grocery/non-grocery/non-store channel in Brazil?
- Who are the leading retailers in Brazil?
- How is retailing performing in Brazil?
- What is the retailing environment like in Brazil?
- Which channels are winning or losing in the fight for consumers’ money?
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This industry report originates from Passport, our Retailing market research database.