Retailing in Paraguay declined in 2020 due to the global pandemic. Consumer confidence plummeted because of lockdown, home seclusion and the closure of businesses.
Despite the requirement to stay at home as much as possible in 2020 value sales of grocery retailers registered a contraction due to a reduction in purchasing power stimulated by job losses and the closure of businesses. Despite the end of home seclusion in 2021, the economic situation remained complex with high unemployment and buying power remaining well below the level seen in 2019.
The shopping habits of Paraguayans vary depending on socioeconomic status. Middle- and higher-income consumers typically shop for groceries once a week or fortnight.
Thanks to strong economic growth, Paraguay’s middle class has expanded significantly since the late 1990s. By the end of the review period, approximately 24% of households was considered middle class, which is high by regional standards, according to the United Nations Development Programme.
People in Paraguay mainly travel by car or bus. The country’s road network is reasonably well developed, though the quality of road surfaces is often poor in rural areas.
During 2020 illegal trade decreased due to the imposition of strict border controls and movement restrictions to halt the spread of COVID-19. However, some relaxation in controls boosted the illegal market in 2021.
The outlook for retailing in Paraguay over the forecast period is broadly positive, with healthy growth in total current value sales and outlet numbers projected. A return to economic development should help to maintain growth in retail spending by local consumers.
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Retailing
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 DefinitionsThis report originates from Passport, our Retailing research and analysis database.
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