BMI View: While long-term prospects look favourable for Venezuela, the short-term growth forecast remains uncertain , and at best will remain subdued over the medium run. The ruling government ' s highly interventi onist stance in retail, along with high inflation, a weak currency and subdued oil revenues provide for a uncertain economic outlook remain the greatest challenges facing the retail sector. The effect will see a rapid contraction in spending and disposable income levels and purely essentials focussed purchases as consumer confidence remains low.
|Headline Household Spending|
Key Views & Developments
While the country's economic struggles continue, discount retailers and sellers of basic goods will continue to perform relatively well.
Low oil prices will continue, affecting Venezuela's balance of payments picture and government income. This will have a negative impact on the government's extensive subsidy programmes and will damage consumer confidence.
Due to unfavourable business conditions in the country, the main trend in Venezuela has been the consolidation of larger chain stores across the retail sector as opposed to increasing numbers of new entrants. We expect this to continue, as only the larger chains have the ability to challenge the big state-owned chains.
Total household spending is set to rise from USD183.6bn in 2016 to USD223.3bn in 2020.
Net income per household is set to rise from USD10,383 in 2016 to USD12,056 in 2020.
The proportion of households earning more than USD10,000 a year is set to rise from 23.6% in 2016 to USD31.7% in 2020.
The proportion of young adults (aged 20-39 years), a key spending demographic, is set to fall slightly from 31.9% in 2016 to 31.6% in 2020.
The Venezuela Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Venezuela Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Venezuela to test other views - a key input for successful budgeting and strategic business planning in the Venezuelan retail market.
- Target business opportunities and risks in Venezuela through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
- Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
- Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
- Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
- Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).
BMI’s Retail Risk Reward Index
BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.
This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.