Rio and São Paulo are not any longer “the center of the universe” in Brazil’s retail: consumer demand growth is migrating from the major coastal cities to the interior and north, according to a report by the Boston Consulting Group.
For decades, São Paulo and Rio de Janeiro were the two Brazilian cities with the highest representation in the purchase of products. The money is there and also the action. But according to an article published by Forbes Magazine on 1st of May, a recent study by the Boston Consulting Group (BCG) shows that consumer demand isn’t growing there as fast as it once was.
The study says that there is a discrepancy between “where Brazil’s leading retailers currently operate and where future growth is projected to come from in the next five years”, say the magazine. The commodity boom helped develop Brazil’s agribusiness sector, which attracted high paying jobs in interior cities like Ribeirao Preto.
Demand growth is migrating from the major coastal cities to the interior and north, where retail investments — from health and beauty to grocery stores — are minimal, according to the BCG study.
Demand is not shrinking in São Paulo and Rio. It’s just not growing as fast as it is in the other states.
Between 2010 and 2020, São Paulo and Rio retail is expected to rise about 27% to $35 billion. The interior cities will see a projected 47% growth rate over the decade ending 2020 to around $60 billion, with total retail consumption estimated at around $128 billion nationwide, according to industry data cited in the report.
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