A report from Business Monitor International (BMI) shows that Peru's retail market is experiencing rapid growth, which is attracting plenty of international retailers.
Experts say this trend is driven by an expanding middle class, easier access to credit, smaller households and increasing urbanization.
“Peru's economic growth trajectory is generally positive. We see growth coming in at 5.2% in 2014, and hovering around that level for the rest of the forecast period ending in 2018,” said BMI analysts.
Meanwhile, positive underlying trends, such as a steady increase in real wages, a rising number of working women and a falling unemployment rate will support growth of the retail sector over the longer term.
One downside to optimistic economic outlook is the slowdown in China. The country is a major consumer of Peru's mined products, and a weakening in demand could have a serious impact on mining industry, and the economy as a whole.
On the other hand, the "Peru Retail Report Q3 2014" reveals that rising incomes and a growing middle class are changing consumption patterns in Peru.
Analysts see a decreasing percentage of retail spending going on food, and a rising percentage being spent on education, cultural activities and luxuries which were previously less of a priority, for example consumer electronics devices and home improvements.
Modern retailers are increasingly looking for new opportunities in Peru, with supermarket operators in particular moving into lower income areas, and outside the capital.
This has meant a change in strategy, with more own-label products and a focus on value.
Shopping centers are a major growth area. The number of shopping centers has increased substantially over the last few years, to 59 in 2014, a figure that Peru's shopping centre association sees doubling by 2019.
International retailers are increasingly interested in Peru. Chile's Falabella and Cencosud have growing footprints in the country, and a number of international fashion and luxury retailers have opened branches in Lima in recent years.
(END) RMB/RMB
Published: 8/14/2014