Stable inflation and decreasing interest rates are leading Fitch Ratings analysts to be bullish on the retail sector in Latin America. In a report, they mentioned that 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 volatility in international debt markets due to the global macroeconomic environment and geopolitical risks is also affecting the retail sector in Latin America. However, some of the top retailers in the region, including FEMSA Comercio, Grupo Comercial, Organization Soriano, and Grupo Coppel in Mexico, Cencosud and Falabella in Chile, and Natura & Co. in Brazil, continue to thrive despite these challenges.
In Mexico, Walmart de México y Centroamérica (Walmex) dominates the market with over 2,800 stores, 300 Walmart Supercenter units
