Boston, MA -- (ReleaseWire) -- 01/15/2015 --As a result of the adverse business environment, particularly in terms of import restrictions and an expected fall in household income, the outlook for the Venezuelan retail sector remains bleak over our forecast period. We expect to see negative growth in total household spending in 2015 and 2016 although positive growth is forecast to continue from 2017 as the long-term economic outlook appears brighter.

Economic instability and Venezuela's business environment are two key drivers behind our decision to downgrade projections over the forecast period. Investing in the country's retail sector presents challenges as high inflation and exchange rate issues have seriously dampened purchasing power. In September 2014, Venezuela's inflation rate rose to 63.4%, the highest in Latin America, resulting in soaring prices for many goods and consumers' inability to afford products, particularly imported ones. Moreover, the government have imposed exchange controls since 2003 and have since then tightened its restrictive policy, making it harder for companies to import foreign items. This has severely limited the range and number of items available in the retail market, deterring new entrants and limiting household spending.

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Also, due to supply issues resulting from import restrictions, international players such as fashion retailers Bershka and Zara have had to limit consumer purchases. As a result of offering low-prices in their outlets across Venezuela, both retailers have experienced a surge in demand for their products which led to the decision to restrict the number of purchases possible per customer. This indicates that purchases will be largely price-driven during our period; and as inflation rates look set to remain relatively unstable, consumers are likely to bulk-buy available items when prices are low. Discount retailers will benefit from this, as price sensitivity largely determines the level of household spending.

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The Venezuela Retail Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's Venezuela Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits

- Benchmark BMI's independent retail industry forecasts for Venezuela to test other views - a key input for successful budgeting and strategic business planning in the Venezuelan retail market.
- Target business opportunities and risks in Venezuela through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Coverage

BMI Industry View

Summary of BMI?s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.

BMI Industry Forecasts

There are four separate 5-year forecast modules in the retail reports. These are:

Headline Retail Forecast: Total Household Spending, (US$bn and local currency, % growth, % GDP, per capita, per household); Spending by Retail Sector for: food and non-alcoholic drink, alcoholic drink, clothing and footwear, housing and utilities, furnishings and home, health, transport, recreation, education, transport, restaurants and hotels, personal care and insurance (US$bn and local currency, % growth, % GDP, % of total spending)

Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tableware, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (US$bn, % Growth);

Household Income and Numbers Forecast: Number of Households (?000,% growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes ? US$5000+, US$10,000+ US$50000+ (?000, % of total); labour force, employment and unemployment (?000, % change)

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