Grocery retailing recorded a sales decline in Latin America in 2020, with most countries seeing worsening performances, including particularly steep declines in Argentina and Peru. Local economies, and therefore many households’ financial circumstances, were badly hit by the measures taken to contain the spread of Coronavirus (COVID-19). However, grocery retailing is expected to register healthy annual growth rates over the forecast period, in spite of the pandemic’s lingering economic impact.
Although grocery retailers were generally allowed to remain open, as “essential retail”, they were still negatively impacted by the pandemic in 2020. The economic consequences of the measures taken to control the spread of the virus, such as job losses, meant that household disposable incomes were feeling the pinch in 2020.
Forecourt-based retailers were heavily affected by the pandemic in 2020. Steep declines in sales were down to the major reduction in road traffic, particularly at outlets not located close to residential areas. With travel severely restricted in much of 2020, losses in consumer traffic and sales were high. Although some traditional grocery retailers were able to meet the demand for local neighbourhood shopping facilities, many struggled during the pandemic, with independent outlets in particular finding it hard to cope with the extra financial burden caused by COVID-19.
With consumers reluctant to leave home for fear of coming into contact with COVID-19, e-commerce, including click-and-collect, gained in popularity as a safe and convenient means of shopping. Retailers, in addition to developing their own e-commerce operations, were also teaming up with last mile delivery companies to supply home shoppers. The launch of the PIX instant payment solution by the Central Bank of Brazil in late 2020 was also seen as the ideal option for small businesses looking to accept digital payments.
In spite of the pandemic’s economic impact, grocery retailing will return to positive growth from 2021. Discounters will remain popular thanks to their low prices, while any channels struggling in 2020 are expected to record healthy growth rates in 2021.
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