Fitch: Only Mexican Retailers Escape Region Wide Challenges

MONTERREY, Mexico--(BUSINESS WIRE)-- Latin American retailers are struggling in 2016, except for Mexico, where they are enjoying a steady increase in consumer spending, according to a new Fitch ratings report.

"Growth has been moderate in Mexico. Consumer credit, low inflation and unemployment, higher remittances and increased retail space increased demand for retailers," said Maria Pia Medrano, Associate Director. "Steady credit card growth and a significant increase in payroll lending have benefited retail sales - a trend expected to continue through 2016."

In Argentina, the peso devaluation by 14.2 percent, coupled with diminished customer purchasing power due to high inflation and lagging real wage increases, is negatively affecting consumer consumption.

In Brazil, weak consumer confidence, rising unemployment and dramatically high interest rates will continue to pressure demand and challenge retailers to generate satisfactory operating cash flow.

In Chile, growing revenue will be difficult due to a subdued economic environment, lower consumer confidence, weak local currencies and high inflation rates in key markets including Brazil and Argentina.

Colombia's retail sector continues to face pressures from rising inflation, currency depreciation and weaker consumer confidence.

The slowdown in the Peruvian economy coupled with the presidential election has led to sluggish growth in local demand and restrained store openings during the first half of 2016.

For more information, a special report titled "Latin American Retail Stats Quarterly" is available on the Fitch Ratings web site at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Latin American Retail Stats Quarterly (First-Quarter 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884987

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View source version on businesswire.com: http://www.businesswire.com/news/home/20160718006228/en/

Fitch Ratings
Maria Pia Medrano
Associate Director
+52 55 5955 1600
Fitch Mexico S.A. de C.V.
Blvd. Manuel Avila Camacho 88, Piso 10
Lomas de Chapultepec, Ciudad de Mexico
or
Johnny DaSilva
Director
+1-212-908-0367
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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