BRAZIL. Travel retailers on Brazil’s borders are struggling through a severe downturn in sales.
On the back of a -40% decline across the sector in 2015, business in the first quarter of 2016 at Neutral’s stores along the Uruguay-Brazil border was a full -25% lower than in the first quarter of 2015.
In Argentina, London Supply reported a -30% year-on-year decline in sales at its Duty Free Puerto Iguazu mall in the first months of 2016.
Those numbers come on the back of rampant growth in preceding years, however.
New retail facilities in the key border locations are also primed for a recovery in Brazilian spending.
Chief among these is the Melancia mall in Rivera, where Neutral opened its 4,000sq m megastore store in September.
“It is a new mall, in a new location opened during the worst political and
economic crisis in Brazil for a long time,” commented Neutral CEO Enrique Urioste.“It will be a difficult year but we know that it is a key asset for when the market recovers.”
The Melancia store has proven its worth in retaining shoppers for longer than in other border locations, with a higher average ticket as a result.
Recovery in border retailing could well come sooner than most analysts predict, Urioste observed.
“We have the absolute conviction that we have taken all necessary measures to go through this crisis and that we will see a strong comeback of the business,” he said.
A feature article on Brazilian border shop retailing will be published in The Moodie Davitt Report Latin America supplement this month. Enrique Urioste will deliver a presentation about border retailing at the 20th ASUTIL Congress in Santiago, Chile on 8 June.
