March 30, 2007 / 8:35 PM / 12 years ago

Reuters Summit-Latin America may see retail expansion wave

(For other news from the Reuters Latin American Investment Summit, click here

By Antonio de la Jara

SANTIAGO, March 30 (Reuters) - Latin America’s brisk economic growth is likely to bring a wave of retail sector expansion this year and next, which could lead to pitched battles for market share.

The region’s economic growth — seen up 4.8 percent this year by the U.N.’s Economic Commission for Latin America and the Caribbean — and a stronger rise in consumer spending have attracted the interest of retailers worldwide.

“Latin American chains are very focused right now on foreign competition,” said Ricardo Martin, chief executive of Mexico’s second-largest retailer, Soriana (SORIANAB.MX), at the recent Reuters Latin American Investment Summit.

“Peru has doubled its consumer spending in recent years. Colombia has made significant advances in security. Brazil is getting closer to being investment grade. All of these factors grab the attention of regional and foreign firms,” said Barbara Angerstein, an analyst with investment bank Celfin Capital.

Colombia already has attracted intercontinental rivals as Chile’s Cencosud (CEN.SN) battles France’s Casino CASP.SN for control over leading supermarket chain Almacenes Exito IMI.CN.

Cencosud Chief Executive Laurence Golborne said his firm is ready to challenge Casino, Exito’s largest shareholder, to gain entry into the Colombian market.

“It’s obviously a very competitive situation, and buying interest in Almacenes Exito will come down to deciding whether or not to pay one peso more than your competitor,” Golborne said earlier this week.

Markets seen as attractive for global retailers include Mexico and Brazil, Latin America’s largest economies where the consumer credit industry is only beginning to gain a foothold.

THE CHILEAN ADVANCE

Chilean retailers, despite lacking presence in the Brazilian and Mexican markets, are among the most aggressive of Latin American retailers seeking regional expansion.

Analysts say Chile’s small size along with the maturity of its consumer and credit markets relative to its neighbors have led its retailers to pursue regional expansion aggressively.

Cencosud and Falabella (FAL.SN) began their regional expansion years ago and now have subsidiaries in Argentina, Peru and Colombia. Together the two retailers plan to invest close to $3 billion to expand in the region over the next five years.

Other Chilean retailers that are candidates for regional expansion are No. 1 supermarket chain D&S DIS.SN and department store chains La Polar (LAP.SN) and Ripley (RIP.SN), which is already in Peru.

Chilean retailers have been successful in repelling foreign competitors in their home country, with failed forays by France’s Carrefour (CARR.PA) and U.S. retailers Home Depot Inc. (HD.N) and J.C. Penney Co. Inc. (JCP.N).

But foreign chains may still give Latin American retailers a run for their money.

“Despite the failure of some French chains like Carrefour and Auchan, I think there are other French chains that could try to gain entry into Mexico as well as firms from other European countries like Britain,” Martin said.

“There’s Tesco (TSCO.L); there’s Sainsbury (SBRY.L), Casino. I feel there are definitely opportunities,” Martin added.

(Additional reporting by Gabriela Lopez in Mexico and Rodrigo Martinez in Chile)

((Writing by Lisa Yulkowski; Reuters Messaging: antonio.delajara.reuters.com@reuters.net; +562 370 4261; editing by Jane Baird)) Keywords: LATAM SUMMIT/ RETAIL

(For other news from the Reuters Latin American Investment Summit, click here

By Antonio de la Jara

SANTIAGO, March 30 (Reuters) - Latin America’s brisk economic growth is likely to bring a wave of retail sector expansion this year and next, which could lead to pitched battles for market share.

The region’s economic growth — seen up 4.8 percent this year by the U.N.’s Economic Commission for Latin America and the Caribbean — and a stronger rise in consumer spending have attracted the interest of retailers worldwide.

“Latin American chains are very focused right now on foreign competition,” said Ricardo Martin, chief executive of Mexico’s second-largest retailer, Soriana (SORIANAB.MX), at the recent Reuters Latin American Investment Summit.

“Peru has doubled its consumer spending in recent years. Colombia has made significant advances in security. Brazil is getting closer to being investment grade. All of these factors grab the attention of regional and foreign firms,” said Barbara Angerstein, an analyst with investment bank Celfin Capital.

Colombia already has attracted intercontinental rivals as Chile’s Cencosud (CEN.SN) battles France’s Casino CASP.SN for control over leading supermarket chain Almacenes Exito IMI.CN.

Cencosud Chief Executive Laurence Golborne said his firm is ready to challenge Casino, Exito’s largest shareholder, to gain entry into the Colombian market.

“It’s obviously a very competitive situation, and buying interest in Almacenes Exito will come down to deciding whether or not to pay one peso more than your competitor,” Golborne said earlier this week.

Markets seen as attractive for global retailers include Mexico and Brazil, Latin America’s largest economies where the consumer credit industry is only beginning to gain a foothold.

THE CHILEAN ADVANCE

Chilean retailers, despite lacking presence in the Brazilian and Mexican markets, are among the most aggressive of Latin American retailers seeking regional expansion.

Analysts say Chile’s small size along with the maturity of its consumer and credit markets relative to its neighbors have led its retailers to pursue regional expansion aggressively.

Cencosud and Falabella (FAL.SN) began their regional expansion years ago and now have subsidiaries in Argentina, Peru and Colombia. Together the two retailers plan to invest close to $3 billion to expand in the region over the next five years.

Other Chilean retailers that are candidates for regional expansion are No. 1 supermarket chain D&S DIS.SN and department store chains La Polar (LAP.SN) and Ripley (RIP.SN), which is already in Peru.

Chilean retailers have been successful in repelling foreign competitors in their home country, with failed forays by France’s Carrefour (CARR.PA) and U.S. retailers Home Depot Inc. (HD.N) and J.C. Penney Co. Inc. (JCP.N).

But foreign chains may still give Latin American retailers a run for their money.

“Despite the failure of some French chains like Carrefour and Auchan, I think there are other French chains that could try to gain entry into Mexico as well as firms from other European countries like Britain,” Martin said.

“There’s Tesco (TSCO.L); there’s Sainsbury (SBRY.L), Casino. I feel there are definitely opportunities,” Martin added.

(Additional reporting by Gabriela Lopez in Mexico and Rodrigo Martinez in Chile)

((Writing by Lisa Yulkowski; Reuters Messaging: antonio.delajara.reuters.com@reuters.net; +562 370 4261; editing by Jane Baird)) Keywords: LATAM SUMMIT/ RETAIL Keywords: LATAM SUMMIT/ RETAIL

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