The Q410 BMI Chile Retail report forecasts the countrys retail sales will grow from US$52.61bn in 2010 to US$81.80bn in 2014, an increase of 55.5%. High consumer spending power, well developed physical infrastructure and a business-friendly regulatory environment are key factors behind the forecast growth in Chilean retail sales.

Chiles nominal GDP is predicted to be US$181.95bn in 2010, with 2009s decline of 1.5% expected to turn into growth of 5.2% in 2010 as the economy recovers. Average annual GDP growth of 4.0% is forecast by BMI between 2010 and 2014. With the population increasing from an expected 17.1mn in 2010 to a forecast 17.7mn by 2014, GDP per capita is forecast to rise by 45.4% by the end of the forecast period, reaching US$15,463. Our forecast for consumer spending per capita is for an increase from US$6,116 in 2010 to US$9,188 by 2014.

In 2005, 66.4% of the Chilean population was described by the UN Population Division as economically active, with 37.5% in the crucial 20-44 age range, which is vital for retail sales. The majority of Chileans live in urban areas (87.7%), according to UN data, with 40% of the population living in the Santiago metropolitan area alone. By 2015, the urban population is forecast to have reached more than 90%, with 37.3% in the 20-44 age band and 68.6% of the population expected to be active.

Chiles youth population is driving demand for consumer goods, with 3.34% of the household budget being spent on clothes in 2007, according to Instituto Nacional de Estadística (INE). This was the highest spending category after cars, rent and public transport.

Retail sub-sectors expected to show strong growth over the forecast period include food and drink, with sales forecast to rise from an expected US$19.37bn in 2010 to US$29.89bn by 2014, a rise of 54.3%. Over the counter (OTC) pharmaceutical sales are forecast by BMI to increase from a predicted US$0.26bn in 2010 to US$0.37bn by the end of the forecast period, up by 46.6%; while automotive sales are forecast to rise by 43.3% to an estimated US$3.21bn by 2014. Consumer electronic products sales are forecast to rise by 27.6%, from an expected US$2.16bn in 2010 to US$2.75bn by 2014.

Foreign travel and tourists have stimulated increasingly consumerist attitudes and consumption in recent years. While global tourism declined by 4% in 2009, according to the UN World Tourism Organisation (UNWTO), figures from INE show 2-3% growth in tourist arrivals to Chile in 2009.
Despite the difficult global economic environment in 2009, leading department store operator Falabella reached an agreement to develop new shopping malls with its smaller rival Ripley.
Retail sales for our Latin American universe in 2010 are expected to reach US$1,166bn, based on varying national definitions. Total consumer spending for the region, based on BMIs macroeconomic database, is predicted to be US$2,590bn. Mexico and Brazil are expected to account for an estimated 74.3% of regional retail sales in 2010, with those two countries plus Venezuela likely to account for 84.6% of all retail sales in the region by 2014. For Chile, its predicted 2010 market share of 4.7% is expected to fall marginally to 4.5% by 2014.