brazil report 2007

Shanghai new consumer dynamics the impact on modern

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Unformatted text preview: y expanding through the opening of new stores or the acquisition of other retailer chains, the fact is that an intense development in retail activity is expected in future years, including medium-sized players challenged to enhance efficiency. Most of the major retailers have announced relevant investment plans which include, in addition to the expansion mentioned above, investments on existing stores, the introduction of new technologies on supply management, marketing and targeting of selected groups of customers. Reading and connecting consumer patterns As a result of globalisation and information technology realities, change has become an abiding feature of the retail and consumer industry. Interacting within this context and also affecting it are the consumers with specific particularities; many of whom are considered to be driving forces which determine trends in the retail industry. The variety of these consumer groups and habits require the proper response from retailers to address specific customer needs. Being the best and most efficient is no longer enough, as it is also important to be different in order to be part of the customer recognition and connection process. OPPORTUNITIES Increasing purchasing power The perspective of a purchasing power increase based on sustainable economic growth will certainly boost the Brazilian retail and consumer industry. A very significant part of the population which is currently considered to be on the border of the consumption market would have a strong impact on the demand and production levels when it enters this market. The expansion of credit and the decrease of interest rates are both fuels for the consumption market. In terms of volume, the Brazilian consumer credit market is still small in comparison with developed countries. Credit penetration have increased since financial institutions began entering operational agreements or joint ventures with retailers. 22 2006/2007 FROM SÃO PAULO TO SHANGHAI New consumer dynamics: the impact on modern retailing* Brazil Steady growth of shopping centres Shopping centres have long been a part of the retail landscape in Brazil. Customised to attend to the needs of more or less sophisticated customers, these places normally offer many options of leisure and convenience activities such as cinemas, restaurants, etc. Some expansion projects are currently in progress in the main cities and new investments are expected to be made in the second and third tier cities, as a consequence of the growth potential consumption. According to ABRASCE, Brazil has 263 malls, most of them in the main metropolitan areas, with more than 6 million square metres of retail space and 42,363 stores. São Paulo and Rio de Janeiro states account for 134 shopping centres, but 69 of them are located out of the capital cities. EMERGING TRENDS Consolidation in the retail and consumer sectors Consolidation in the Brazilian retail market is expected to continue, although at a lower intensity in foo...
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