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.
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.
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