The Q112 BMI Brazil retail report forecasts that the countrys retail sales will grow from BRL1,464.23bn (US$798.04bn) in 2011 to BRL2,146.39bn (US$1,169.83bn) in 2015. Generally positive trends in underlying economic growth, an enormous and growing population and rising disposable income are key factors behind the forecast growth in Brazils retail sales. Easier access to credit and the emergence of a wealthier middle class are also likely to help the value of the retail segment increase during the forecast period.

Brazils nominal GDP is predicted to be US$2,547.9bn in 2011, with real GDP growth of 3.0% expected for the year. Average annual real GDP growth of 4.0% is predicted by BMI between 2011 and 2015. With the population forecast to increase from 197mn in 2011 to 203mn by 2015, GDP per capita is forecast to rise to US$19,317 by the end of 2015.

The national monthly minimum wage increased by 26% in real terms between 2003 and 2006, and in 2011 the average annual salary is expected to be US$10,697. The lifestyles of middle and upper-income groups increasingly mirror those of their counterparts in developed countries and overall purchasing power has been increasing.

Although income equality is a major concern, with the poorest 20% of Brazilians (mainly in the north of the country) accounting for just 2% of all income, increases in the minimum wage and additional funding for welfare programmes mean incomes in the north have been growing at double the rate of those in the south, and the region offers very significant growth opportunities. In addition, President Dilma Rousseff is committed to continuing social welfare programmes such as the bolsa familia (family allowance), which has considerably raised the spending power of Brazils low-income population.

In 2005, 67.8% of the Brazilian population was described by the UN as economically active, with 40.3% in the 20-44 age range, which is vital for retail sales. More than 84% of the population was classified by the UN as urban. By 2015, the urban population is forecast to exceed 88%, with 39.5% aged 20-44 and 66.9% of the population expected to be economically active.

The non-grocery sector is outperforming the food sector as consumers increase their spending on household items and durable goods such as furniture, domestic appliances, cars and clothes. Easier access to credit is also proving to be good news for the retail sector. There were 118mn credit cards in Brazil in 2007, up from 44mn in 2003, according to Banco Central do Brasil (BCB).

Retail sub-sectors that are expected to show strong growth over the forecast period include food and drink, with sales predicted to rise from an expected US$218.22bn in 2011 to US$351.99bn by 2015, a rise of 61%. Mass grocery retail (MGR) sales are forecast to rise from an expected US$70.88bn in 2011 to US$103.84bn, an increase of 46.5%. Supermarkets will continue to take the lions share of sales by value, but of increasing importance are the convenience, discount and hypermarket formats, which are all expected to register significantly more rapid growth over the forecast period.

Automotive sales are forecast to increase by 35% during the same period to reach nearly 5.3mn units sold in 2015, with domestic demand stimulated by government intervention, tariff protection, tax concessions and preferential vehicle financing terms.

The consumer electronics sector offers growth potential in key digital products groups such as computers, digital cameras (which both have less than 30% penetration) and LCD TV sets. It is predicted to grow by more than 44% between 2011 and 2015, from US$30.20bn to US$43.58bn.

BMI forecasts over-the-counter (OTC) pharmaceutical sales to increase from an expected US$5.40bn in 2011 to US$8.09bn by 2015, up by nearly 50%.

Retail sales for our Latin American universe in 2011 are expected to reach US$1,344bn, based on varying national definitions. Total consumer spending for the region, based on BMIs macroeconomic database, is predicted to be US$3,004bn. Brazil and Mexico are expected to account for an estimated 74.0% of regional retail sales in 2011, with the two countries still likely to account for 72.5% of all retail sales in the region by 2015. Brazils predicted 2011 market share of 59.4% is expected to be at the same level in 2015.