Chile retailing market moving towards a more chained convenience model as a result of urbanisation over recent years
Retailing in Chile - a new market research report on companiesandmarkets.com
PR-Inside.com: 2014-05-01 07:42:04
The Chilean economy experienced a slowdown in 2013 compared to the pace of growth registered in the 2010-2012 period. However, this change in the economic performance in the country´s economy was not reflected in a boost to consumer consumption patterns. The performance of the retailing industry in Chile therefore remained at similar levels over the last three years of the review period, supported by this high consumer expenditure.
In 2013 the Supreme Court of Chile ruled against one of the major retailers of the country â Cencosud â forcing it to repay consumers around US$70 million as compensation for unilateral changes in credit card contracts. This entailed significant loss of reputation to the retailing industry, as consumers become more aware of corruption and malicious practices and forced regulatory agencies to widen and strengthen the rules governing the industry.
Chile is becoming increasingly urbanised, not only in the capital but also in other more provincial and second-tier cities. The ways in which retailing has been adapting to this urbanisation have been mixed. Grocery retailing has been adopting a convenience model through chained convenience stores, forecourt retailers and smaller supermarkets. On the other hand, non-grocery is set for expansion via the opening of new shopping centres which are likely to become new public spaces in emerging suburban areas.
Competition between retailers has become quite intense in terms of their private label supply. Companies realise that Chilean consumers are particularly cost-sensitive in almost all products of the retailing industry, and therefore are especially prone to prefer private label over most recognised brands. Thus, retailers improve the quality, design and reach of their private label in order to meet the preferences of their customers.
The pace of growth of the retailing industry is set to slow down over the forecast period while consumers are expected to become more conservative in terms of the acquisition of new debts. Companies are increasingly realising that explosive growth is no longer possible in Chile, therefore will look for organic growth models, which will entail slower performances. Finally, regulators understand that the retailing industry has been operating under a fairly flexible normative framework, which facilitated several irregularities and abuse, therefore the implementation of stricter regulations will become commonplace over the forecast period.
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