Category Archives: Economy

Guarded outlook for Mexican retail in 2019

The Mexican retail sector registered a sluggish year in 2018, posting same-store sales growth of just 0.1% and all-stores growth of 3.5% for the year, according to the National Retailers Association (ANTAD).  Retail performance showed deceleration at year-end, posting the slowest fourth quarter expansion since 2014.  On the plus side, sales during Mexico’s four-day “Buen Fin “ (Black Friday) promotion in 2018 grew 8% with respect to the previous year, the national chambers of commerce, services and tourism (Concanaco Servytur) reported.  On-line sales during the promotion jumped 50% for the same period, demonstrating ongoing advances in consumers’ shift to shopping on line.

ANTAD is adopting a cautious outlook for 2019, projecting a 2.2% increase in all-stores sales but a contraction of 1% in same-store sales for the current year.  The growth of electronic commerce remains a leading trend for the industry, with Mexico striving to exceed US$20 billion in on-line sales for the year with the hope of surpassing Brazil as Latin America’s top e-commerce market.  Industry analysts project that policies proposed by the new Mexican administration could provide a boost to retail.   These include monthly stipend programs for qualifying members of segments such as youth, elderly and the disabled, as well as a 16% increase in the minimum wage.  Bodega Aurrerá is expected to benefit in particular from these measures across its formats.  Also, the new government reduced the VAT tax in the northern zone along the U.S. border to 8% from 16%, which is expected to provide a sales bump to store chains well established in the area such as Soriana, Walmart, Casa Ley, HEB and Super Norte.

Mexico launches Special Economic Zones

ZEEs Source: Dinero en Imagen

Throughout the fourth quarter of 2017, pundits and business media in general in Mexico have focused mainly on the jarring ups and downs of NAFTA renegotiations between the United States, Mexico and Canada.  As the year winds down, this topic has lately been eclipsed by the passage of tax reform legislation in the U.S., and at least on this side of the border, how it might affect the Mexican economy going forward.  These high profile issues have served to overshadow an economic development initiative in Mexico that otherwise might have captured more attention: The declaration of Zonas Económicas Especiales (ZEE), or Special Economic Zones, aimed at stimulating investment in six southern states.  Continue reading Mexico launches Special Economic Zones

Haitian migration impacting Tijuana economy and culture

TijuanaIn March 2017, approximately two months ago, we accompanied representatives of a funding organization to the city of Tijuana to learn about the impact of Haitian immigration in the area.  Tijuana, an industrial city located on the U.S.-Mexico border near San Diego, California, is well known as a last stop for migrants from Mexico and other Latin American countries before trying to enter the United States, legally or otherwise.  Our colleagues at the foundation had provided funds for local organizations assisting the Haitian migrant community and they wanted to see how the money was being spent.  What we found was truly remarkable. Continue reading Haitian migration impacting Tijuana economy and culture