Image credits: Pankaj Kaushal
News Article

ANTAD Predicts Sector Recovery by 2022

By Jan Hogewoning | Wed, 09/30/2020 - 09:22

ANTAD stated it does not expect the self-service and department stores sector to recover its pre-COVID-19 sales volumes before 2022, El Economista writes. While the association says economic reactivation has allowed sales to gradually increase, the process remains slow. For this reason, the association is predicting an accumulated drop of between 4 and 5 percent for the sector by the end of this year. While recovery may have to wait for over more than a year, it is markedly more optimistic than indications of GDP performance for the sector, which forecast recovery as far as 2024 when put against 2018 figures.

“What has greatly affected sales is the drop that has occurred in nominal wages, as well as the loss of jobs that make families behave with more caution,” said Javier Salas, Director of Economic Studies at ANTAD, during an announcement for the virtual ANTAD Expo, which is to take place from Oct. 14 to 23. He also stated that part of the recovery made by department stores is being driven by growth in e-commerce. This is now close to equating floor sales in volume. Department stores suffered a significant drop in sales of 15 percent but have been able to stabilize over the past two months. While the aggregate for the year stands at a nominal negative 7 percent, the total that will later be recovered will allow the sector to reach an accumulate 4 to 5 percent growth.

In an interview with MBN, Agustín Gutiérrez, Partner at McKinsey & Company, confirmed that e-commerce has absorbed some of the lost sales in the retail sector. “In recent years, e-commerce in Mexico already had been growing. However, this crisis has been an accelerator for digital channels due to lockdowns around the country,” he said. “Most people were forced to use digital sales channels to avoid going to the supermarket.” On the other hand, Arturo Vasconcelos, Deputy Director General of Chedraui supermarkets, iterated his confidence that supermarket visits are here to stay. “Supermarket visits will not disappear. Some customers will go fully online, while others will use both options,” he said. To him, going to the supermarket is an experience that Mexicans enjoy. “We know that clients really enjoy coming to the supermarket, to touch the products they choose and to explore the variety,” he told MBN. Similar observations were made about malls by Partner and Director of Planning at MAC Arquitectos, Juan Rodriguez. To him, malls serve a bigger purpose than just purchasing goods. “While the pandemic has accelerated the demand for e-commerce, the need to socialize remains and malls are a natural fit for that. For years, they have been social hubs,” he told MBN this month.

The data used in this article was sourced from:  
El Economista, Mexico Business News
Photo by:   Pankaj Kaushal
Jan Hogewoning Jan Hogewoning Journalist and Industry Analyst