Brazil has emerged as one of the leading markets in the world. There is huge growth of sales in the retail sector. It is expected to grow continuously over next few years because of a constantly declining inflation rate which allows continuous expansion of credit conditions ease; i.e., substantial demand for durable goods and real incomes and growing demand for non-durable consumer goods.
The process of the regeneration of retail industry in Brazil is on its way but the market remains relatively divided, creating a great deal of scope for large markets for growing their market share in the future. Supermarkets account for the majority of Brazilian retail industry. The combination of higher income levels, economic stability, extended credit and creation of new jobs has allowed millions of consumers to rise from lower-income segments which are being called as ‘the new middle class.’ This emerging middle class has driven up retail records. Superstores, electronics, pet shops, appliances specialists, garden centers and appliances specialists’ retailers have presented an increase in sales at a high rate. The new wave for internet shoppers is representing opportunities for small and large players to advance into internet retailing, which attempts for growing success in the market. A strengthening middle class base and a rise in purchasing power, which is a result of stable macroeconomic factors, are fueling the growth in Brazilian retail industry.
The Northeastern Brazilian region has started attracting retailers. Grocery and non-grocery retailers are attracted by segments which are untapped. Heavyweight players in the market have plans to open new outlets and distribution centers in the region. Along with increasing preferences for the latest fashion apparels, there is high spending on clothing imports and apparel items. Brazil is ahead of China and India in clothing imports/exports and apparel consumption, and is considered as an emerging market for investment in retail apparels. There is huge potential for success of retail apparel in Brazil. Brazilian standards of retail markets are mixed predictably, accounting from fashion specialty retailers in urban areas to niche boutique retailers and from discounters, hypermarkets and large department stores through street traders.
The retail sector in Brazil is as innovative as compared to any retail sector in the developed world. The retail market is increasingly growing internationally because the global chains do wake up to opportunities in a country which emerges from economic challenges in the long run. The retail supply channel in Brazil combines a mix of creative supply chain retail and financiers such as banks who operate retail chains directly. Even large retailers offer their own credit facilities. Credit, consumerism and scales are the day’s order for the Brazilian retail market.
There is a huge shift towards non-food products including textiles, gasoline stations, electronics and drug stores that is accounting for 24% of sales. Super markets have largely inclined towards non-food products.
A huge boom in credit availability and a growing middle class are breaking the shackles of retail growth. There are huge opportunities for foreigners to invest in the Brazilian retail market and reap huge profits.