Retailing rebounded strongly in 2021 after contracting in 2020. The rollout of vaccines and an alleviation in the pandemic enabled restrictions to be eased and normal lifestyles to resume.
Due to the relatively shorter time period for which Panama imposed lockdown and movement restrictions in 2021 compared to other countries in the region and around the world, all channels with the exception of home shopping generated positive growth. This positive growth also represented a complete turnaround from 2020 when all channels with the exception of e-commerce recorded steep contractions when the pandemic was at its height and vaccines had not been created.
Most consumers in Panama shop every 15 days, in line with when they receive salaries. There is also a growing preference for modern retailing channels, although traditional retailers continue to be preferred for certain types of products.
Although significant efforts have been made to reduce poverty, access to basic services is not universal and remains linked to factors such as geographic location, education levels, ethnicity and household income levels. Nonetheless, by 2021, less than 3% of the population lived below the international poverty line of USD3.
The travel infrastructure in the country has improved considerably over the review period with latest lines becoming operative mid-2019. These changes obviously affect the ways in which consumers shop as it is now easier to buy a few items across multiple outlets at once during the week and carry them home than wait until payday to do one large weekly or monthly shop.
The level of employment in Panama is relatively high compared to the rest of the region, although the Panamanian government still faces the problem of an informal economy. According to data from the National Competitiveness Centre (Centro Nacional de Competividad, CNC), the informal economy comprises of over 194,000 small and medium-sized enterprises (SMEs).
Retailing is set to continue growing over the forecast period. Much of this growth will stem from urban mobilisation and revitalisation of particular regions with industry players seeking better locations for their outlets and in underserved communities.
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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.See All of Our Definitions
This report originates from Passport, our Retailing research and analysis database.
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