Unlock the full potential... Can Brazil continue to bounce back in 2019?
I
t is fair to say that 2018 was a disappointing one for the Latin American economy, with
countries such as Venezuela, Ecuador and Argentina suffering the greatest losses. GDP growth for Mexico and Uruguay was also weak. Focus Economics estimates that
LatAm’s GDP overall increased just 1.7% year-on-year in Q4 2018, however this was an improvement on +1.5% in Q3. “Despite the modest uptick, growth remains weak in the Latin American economy,” says the data & analysis firm. “Weaker global trade, a noisy
election cycle, shifting sentiment for emerging-market assets and one-off shocks in major players caused the recovery to flounder last year.” This potent cocktail made for
harsh trading conditions, as many DF&TR operators told TRBusiness this issue, including Dufry, which reported sales declines in Argentina, Brazil, Chile and Uruguay last year. “From an external perspective, [we
need] to see currency fluctuations stabilising or even better, recovering, mainly in Latin America,” Dufry CEO, Julián Díaz told TRBusiness. “This will also influence the
neighbouring countries in South America; maybe excluding Argentina... [however] we expect Central America and the Caribbean Islands to continue at similar levels
Despite the challenging economic climate, DFA continues to invest in new stores in the Americas, such as this huge one on the Uruguay/Brazil border.
as in 2018.” This content is for subscribers only.
Uncertain trading picture Singing from the same hymn sheet, IAADFS CEO and President Michael Payne tells TRBusiness on p24 that attendance figures to the upcoming Summit of the Americas may be impacted by the current conditions in LatAm. “We’re pushing a little against the
Consumer profile: South America
Forty-nine percent of travellers from South America visit duty free stores according to a m1nd-set study shared with TRBusiness. Of that percentage, 46% will actually purchase something from the store. Travellers from South America visit
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headwinds from the South American economy which is down, and I suspect we are going to feel that, but how that translates into the exact numbers and people, I don’t know that yet.” Duty Free Americas (DFA) isn’t
right now,” says DFA President, Leon Falic. I can’t really predict much today. There’s a lot of moving parts to consider. Obviously, Brazil, Mexico
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visit to a duty free store and 80% will plan their purchase in advance. South American duty free shoppers
2.5 categories on average, among the most visited insists m1nd-set, with 67% browsing in perfumes, 31% alcohol and 28% confectionery. Forty-one percent of South American travellers will plan their
MARCH 2019
spend $133 on average, mainly on perfumes (38%) and alcohol (15%). Interestingly, over half (51%) make purchases for self-consumption. The top three purchase drivers for
travellers from South America comprise the following: Price advantage (37%); good value for money (33%); and products unavailable
Will the new Brazilian government bring about stability in 2019?
TRBUSINESS 49 at home country (25%).
shy about sharing its opinions on the trading environment, but is reluctant to offer a prediction for when things might normalise. “I would say the world is uncertain
“Weaker global trade, a noisy election cycle, shifting sentiment for emerging-market assets and one-off shocks in major players caused the recovery to flounder last year.”
FocusEconomics
LATAM REPORT
Off the back of a challenging year for operators in Latin America, many remain uncertain as to how 2019 will pan out. However, signs of a slight uptick in Brazil are certainly encouraging and they are hoping that revival will continue. Charlotte Turner reports.
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