Macroeconomic conditions are improving in Latin America, leading Fitch Ratings analysts to be bullish on the retail sector in the region. In a report, they mentioned that stable inflation and decreasing interest rates will benefit retailers this year. Additionally, there are retail market dynamics at play, with increased competition from online retailers prompting traditional retailers to enhance their product offerings and improve the shopping experience to retain market share.
Retailers in Latin America are focusing on a balanced strategy between growth and profitability when executing digital strategies. The report highlighted that merchants are being more prudent with their capital expenditures, investing in logistics optimization and strengthening customer relationships. Inventory management remains critical for profitability, with Latin American retailers starting 2024 with improved inventory levels after reductions in 2023.
The report also mentioned the volatility in international debt markets due to the global macroeconomic environment and geopolitical risks. Some of the top retailers in Latin America, according to Statista, include FEMSA Comercio, Grupo Comercial, Organization Soriano, and Grupo Coppel in Mexico, Cencosud and Falabella in Chile, and Natura & Co. in Brazil. In Mexico, Walmart de México y Centroamérica, or Walmex, dominates the market with over 2,800 stores, 300 Walmart Supercenter units, and 167 Sam’s Club stores.