Food and grocery is by far the largest product sector in Mexico in terms of share of total retail sales. This sector is expected to witness a healthy CAGR of 5.1% over the forecast period to reach MXN3,537 billion by 2019. Modern retailing is gaining increasing importance in Mexico, and convenience stores command the majority of sales, having accounted for 35.4% of sales in 2014. However, hypermarkets, supermarkets, and hard discounters closely follow convenience stores, accounting for 30.9% of sales in the food and grocery sector. An increasing number of retailers are expanding their footprint and offerings, backed by increased consumer interest in modern stores. Food and grocery retailers are trying new marketing strategies and click and collect services to reach more customers, and are focusing on new store formats and remodeling existing stores, to strengthen their presence in the market and to drive sales.
Key Findings
– Food and grocery is expected to grow at a CAGR of 5.1%
– Convenience Stores (including Independents) and Gas Stations command a major share in country’s overall food and grocery retail market
– Retailers have been focusing more on new store formats and remodelling their existing stores to strengthen their presence in mid-sized destinations
– Demand for healthy food on a rise with increasing concerns over obesity. Mexico turns out to be an early adopter of taxes on sugary beverages (10% per litre) and calorie rich junk foods (8% VAT)
– Drinks segment is expected to be the most promising market during the forecast period, with a CAGR of 5.9% over the next five years.
