Venezuela has the world’s highest rate of inflation, with the non-official estimate in 2017 being 2,600%. The causes of hyperinflation are the uncontrolled injection of money into the system and a fall in the production of goods, leading to an imbalance between the abundance of money and a shortage of products.
In 2017, the Venezuelan economy continued to struggle, with real GDP declining by 9% and the country having one of the lowest real growth rates per capita in Latin America, according to Euromonitor International. Consumer sentiment has also been hampered by rising inflation, which is eroding purchasing power and subsequently undermining spending on dining out.
The drop in purchasing power has led to a change in consumption patterns. According to an industry representative, since the end of 2016 the main reason for consumers to visit fast food outlets has been when taking children to the park and wanting to buy them an ice cream or cake.
In spite of Venezuela having the slowest broadband speeds in Latin America, many individuals have begun to operate “social media restaurants”, while more established outlets have started to offer online ordering. The restrictions imposed by the government, the shortage of basic goods, frequent power outages and water rationing due to the dire economic situation have all made it increasingly difficult to establish a traditional restaurant.
The economic climate in Venezuela is unlikely to change over the forecast period, with the country continuing to witness high triple-digit inflation and shortages of products and raw materials. Venezuela is expected to continue to face an unstable future due to its heavy dependence on oil prices.
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Discover the latest market trends and uncover sources of future market growth for the Consumer Foodservice by Location industry in Venezuela with research from Euromonitor's team of in-country analysts.
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This industry report originates from Passport, our Consumer Foodservice market research database.