Retail in Chile

When we talk about Retail, we refer to the trade that is done in detail , that is, when sold directly to consumers . Among the most traditional retail formats include department stores, pharmacies and supermarkets, among others.

However, the relevance that have reached big chains in the market today is not by chance, but much of it corresponds to the concern of companies in improving their processes for the customer , investing much part of its resources in both quantitative and qualitative methodologies to understand consumers and their needs.

At first, the Retail Industry in Chile had only a couple of shops that were located in the most central areas of Santiago . The first hypermarket was built in 1976 was an important milestone for the industry due mostly to its location, outside the central areas of the city. Then in the 80s Chile started to adapt formats and models from United States and we can undoubtedly say that retail started the economic success by the end of that decade.

It was all pretty fast after that, retail chains expanded all through the city and have had a significant growth ever since. Business started to diversified and business started to compete in different markets such as department stores, supermarkets in all of their formats, management of shopping centers and have now moved up to finance through credit cards and even farther into banking.

Forecasts are more than optimistic on this matter. A higher consumption capacity, better infrastructure and a favorable regulatory environment will drive up retail sales in the country in the next four years .

According to reports made by the industry, sales will rise 14.5% between 2011 and 2015. If by 2011 the retail sold US$ 52,990 million at the end of the next four years that figure will hit US$ 60,690 million annually.

The increase in purchasing power is one of the drivers of increased sales per square meter , along with the increase in surface of stores.

Derived from good forecasts for the retail, also the subsectors will show positive results in the period. In fact , much of the incorporated areas from the sector will show a higher increase.

Such is the case of the food and beverage industries . Sales in this category will rise 45 % , from US$ 25,040 million to US$ 36,320 million over the same period of time. The industry will aim to continue the growth outside of the capital, Santiago. Sales in supermarkets are expected to growth almost 40% reaching US$ 28,470 million in 2015.

Sales for medicines that don’t need prescription will also increase reaching US$ 750 million , which implies an increase of 31.5 % in 2015 , explained by an aging population and subsequently an increase in illness.

Consumer electronics products will continue to rise to double digits. In this particular sector, Chile is well-known for being one of the most sophisticated markets , given that GDP per capita is higher than countries such as Argentina and Brazil. Thus, the category is expected to increase 26.6 %, from US$ 2,780 million in 2011 to US$ 3,520 million in four years.

In the next years, the retail industry will have to keep up with the trends that have brought new technologies to the market, among which include electronic and mobile commerce . The challenges in the industry are mainly focused on developing new platforms that respond to the demand for more personalized products and services , offering greater choice to consumers who are increasingly looking for specialized products, and improve standards of care and service .