Latin American Food and Grocery Retail Market are estimated to grow at a CAGR of 5.5% during the forecast period. This growth is largely attributed to an increase in per capita income, a rise in disposable income, and the liberalization of foreign direct investment. Some other factors contributing positively to market growth include the increasing population, adoption of technology and e-commerce, improvements in the supply chain, and increasing globalization and trade agreements. The market also represents the effects of COVID-19 on the overall changes in consumer behavior.
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Current Market Trends
· The market is largely influenced by the supermarkets in Mexico, Argentina, Brazil, Chile, and Costa Rica, which majorly focus on dairy products and fresh fruit and vegetables (FFV). For instance, the Brazilian Supermarket Association (ABRAS) reported, supermarket revenues to reach $145.0 billion in 2020, representing 7.5% of the country’s GDP.
· The market is segmented by products (into packaged food, unpackaged food, beverages, and others), by distribution channel (online and offline), and by region (into Brazil, Colombia, Mexico, Argentina, and Rest of Latin America).
· The major market trends include the expansion of organized retail chains and increasing demand for processed food in the region.
· Carrefour S.A. is the major market player that operates in around 12,225 stores under various banners, including hypermarkets (Carrefour), supermarkets (Carrefour Market), convenience stores (including City, Contact, and Express), and cash-and-carry outlets (Promocash) in 30 countries in Europe, Latin America, Africa, Middle-East, the Dominican Republic, and Asia. The company has 1,207 hypermarkets, 3,412 supermarkets, and 7,193 convenience stores in Latin America.
· The growing middle-class population in emerging countries is contributing considerably to the growth of the food and grocery retail market. There is a huge surge in the demand for high–quality consumables and groceries. Thus, retailers are expanding their product portfolios with healthier, more expensive, and diverse food options. Additionally, Latin America's food and grocery retail market is growing attributing to the growing supermarket shopping culture.
· The major problem experienced by the market is the prevalence of unorganized businesses in the industry. The poor management exhibited by such enterprises can negatively affect consumer confidence. These can be addressed by the enforcement of strict regulations to ensure quality and safety. Unemployment and inflation can also a restraining factors in the longer term, as these will potentially affect the consumers' purchasing power.
· Increased urbanization and industrialization are prompting people to seek quick, aesthetic, and high-quality meals. The urban lifestyle is initiating the masses to switch towards ready-to-eat and ready-to-cook options. The availability of customized ready-to-eat and ready-to-cook meals is further contributing towards the growth of the Latin America Food and Grocery Retail Market, as these cater to lifestyle needs in addition to food needs.
· In September 2023, Kroger Co. and Albertsons Companies Inc. signed an agreement with C&S Wholesale Grocers, LLC for the sale of 413 stores, 8 distribution centers, 2 offices, and 5 private label brands, across 17 states and the District of Columbia This transaction is part of their planned merger, which was announced on October 14, 2022. This leads to the establishment of well-capitalized competitors in the new geographies.
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The top Brazilian relatives include Carrefour, Assai, Grupo Pao de Acucar, Grupo Mateus, Cencosud, and more. Their performance is benchmarked by the key global market players including Walmart, Costco Wholesale Corporation, 7-ELEVEN Inc, Amazon.com Inc, The Kroger Co., Target Brands, Inc, ALDI, AEON Co Ltd, CA Carrefour, Schwarze Gruppe. Thus, it can be concluded that the market is steadily growing with a high growth potential shortly attributed to the normalization of what is now called urbanization and the intervention of technology in the various operations across the industries.
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