January 16, 2020 / 9:52 PM / a month ago

UPDATE 1-Mexico retailers see slight slowdown in sales growth for 2020

(Recasts, adds quotes from industry group officials, results details)

By Daina Beth Solomon

MEXICO CITY, Jan 16 (Reuters) - Mexican retailers expect sales growth to slow slightly in 2020 after a stronger-than-expected performance last year, a top industry association said on Thursday.

Sales at stores open at least a year are forecast to climb 3% in nominal terms this year after an increase of 3.4% in 2019, according to the group known as ANTAD.

Mexico has entered its second year under leftist President Andres Manuel Lopez Obrador, whose policies have unsettled the private sector, and pushed the economy close to recession.

“The biggest threat is confidence, certainty, public policy so that investments keep coming in and so that we see economic growth,” ANTAD chief Vicente Yanez told a news conference.

Lopez Obrador took office in December 2018 pledging to boost the economy. But analysts believe Mexico’s gross domestic product may have registered a contraction for the first time in a decade when official figures are published in coming weeks.

Retail has been one of the few bright spots in the economy, said Javier Salas, ANTAD’s head of economic studies.

Growth was slightly better than expected among ANTAD’s 100 members last year due to store openings, solid winter holiday sales and strong remittances, he said.

Even so, ANTAD said retail outlets have had to contend with an ever-growing informal sector of street vendors and outdoor marketplaces that likely benefited from Lopez Obrador’s welfare programs.

For example, spending by senior citizens in Mexico City who receive federal aid had fallen 84% since the government allowed them to convert supermarket vouchers into cash, Yanez said.

“Giving out these resources in cash to the economy doesn’t necessarily yield good results,” Yanez said. “Surely, they went to the outdoor markets, they went to informality.” (Reporting by Daina Beth Solomon Editing by Bill Berkrot)

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