Retailers see Chile consumer demand falling in 2009

By Pav Jordan

SANTIAGO, Nov 5 (Reuters) - Chilean consumers will likely spend less next year, worried about inflation and their jobs in a slowing global economy, leading retail players said on Wednesday.

Chilean consumers, already facing the highest inflation in 14 years, are worried about the impact of the global crisis on their country's economy.

"I think that consumer (spending), for different reasons ... is going to fall next year," said Alfredo Moreno, a board member of Chile's Falabella FAL.SN, one of the region's top diversified retailers.

"Because people are feeling their wealth being hit, in the falling prices of stocks, because of the uncertainty, because inflation has made people poorer and because some imported products are more expensive due to the value of the dollar."

Retailers were among the biggest beneficiaries of Chile's booming economic growth in recent years, becoming regional giants as copper wealth spurred spending in the Andean country.

Austere fiscal policy has left the economy better shielded than most to external shocks, and the government has taken measures to protect liquidity as the global credit crisis spreads.

But analysts predict a recession in the United States, the United Kingdom, some European countries and Japan, and most say Chile will feel some impact at least.

In its quarterly monetary policy report published in September, Chile's central bank forecast total consumer demand would grow 5.6 percent this year and then grow by a weaker 4.3 percent in 2009.

The bank said demand would fall amid a projected deceleration in growth in investment and public spending.

Laurence Golborne, chief executive at diversified retailer Cencosud's CEN.SN, told Reuters on the sidelines of a seminar in the Chilean capital that 2008 sales at the company continued to outpace last year's as it expands regionally.

But he said consumer demand was less dynamic.

"We expect to see consumer demand lag a little in 2009," Golborne said.

Cencosud last month suspended the placement of a bond issue worth up to $455 million due to market turbulence after earlier announcing it would delay investing $300 million in projects planned through 2011 given uncertainty generated by the global financial crisis.

The Santiago-based company runs supermarkets, department stores and home improvement stores, and has operations in Argentina, Brazil, Colombia, Chile and Peru. (Editing by Leslie Gevirtz)