The world has seen massive change in 2020 due to ongoing effects of the coronavirus across the planet. Here, Jorge Lizan, Managing Director of Lizan Retail Advisors offers an insight into how the virus has affected Latin America and its retail market.
The coronavirus landed in Latin America on 26 February, when Brazil confirmed a case in São Paulo. Aside from the health impact, the region has experienced an economic impact as well. In May, Brazil became the country with the third-highest number of confirmed coronavirus infections in the world, after registering a total of more than 250,000 cases. Only the US and Russia have recorded more infections at this point. Some experts say that Brazil’s real figure could be 15 times higher.
—– ARGENTINA —–
On 11 May, the president added over $5.6bn to the public spending budget. A Central Bank poll released 8 May showed analysts estimating an economic contraction of seven percent in 2020. On May 8, the government extended the national quarantine—first announced March 20, through May 24. The government also announced a progressive reopening of activities, while stricter measures continue in the metropolitan Buenos Aires region. Some shopping malls have reopened little by little in the interior of the country, specifically in the provinces of Jujuy, Corrientes and San Luis, but sales continue to be low. Recently reopened shopping malls did not enable children’s games or cinemas and only few opened the food courts.
—– BRAZIL —–
Brazil’s President Jair Bolsonaro saw a second health minister quit on 15 May. Mr. Teich resigned after less than a month in the job following disagreements over the government’s handling of the country’s escalating coronavirus crisis. Nelson Teich had criticized a decree issued by President Jair Bolsonaro allowing gyms and beauty parlours to reopen. Brazil has recently surged past Germany and France in terms of its coronavirus caseload, becoming one of the world’s hotspots. Paraguayan President Mario Abdo Benítez has said the spread of coronavirus in Brazil threatens his country’s success in containing the virus. Mr. Benítez said more than half of Paraguay’s 563 cases were people who had entered from neighboring Brazil. Paraguay has spent the last two months under a strict lockdown, and most people with the disease are being quarantined in guarded shelters.
—– CHILE —–
In a televised address, President Sebastián Piñera announced new measures, including: distributing 2.5 million food baskets to lowincome families, establishing two new funding institutions to make loans more readily available for small business, implementing a mental health plan, increasing the number of shelters for patients who may not have appropriate conditions for isolation at home to complete quarantine if known to have the virus, and committing to a better system of releasing more localized epidemiological information. Chilean retail has increased its interactions on social networks during the pandemic with Casa Ideas as leader. The sector category ranking reveals that the Chilean chain of stores Casa Ideas was the one that generated the most interactions during the third month of the year. Despite having a smaller cross-platform audience than seven other top ten categories, it generated more than 87,000 interactions. The most recent ComScore and Shareable report on retail companies shows that in March alone, more than 600,000 cross-platform actions (shared posts, “likes” and comments, among others) were generated on Facebook, Twitter and Instagram.
—– COLOMBIA —–
On 5 May, Duque extended the national quarantine, which originally went into effect on 24 March, through 25 May. Under this decree, which has seen three two-week extensions through 27 April, 11 May, and now 25 May, land and water borders will remain closed with domestic and international flights suspended through 30 May, as previously announced mid-March.
Colombia’s national flag airline Avianca went bust in the wake of the coronavirus pandemic. Avianca filed for Chapter 11 bankruptcy in the US Southern District of New York, blaming its collapse on the “unforeseeable impact of the Covid-19 pandemic”. Avianca, which was founded in 1919, is the world’s second-oldest continuously running airline and is also part of the Star Alliance.
Grupo Éxito’s Viva Malls launched its new online shopping centre, Domicilios Viva and “Buy and collect”. These new alternatives that bring the best from the physical to the virtual world drive the reactivation and preservation of approximately 1,000 jobs in the country. Through this digital platform, the company offers the services and purchase catalogs of more than 50 stores, with a “click and collect” service.
—– ECUADOR —–
On 5 May, the government announced the extension of the state of exception for 30 more days starting on 16 May. When first announced on 16 March 16, President Moreno announced the state of exception during which there would be a nightly curfew from 9pm to 5am, as well as limits on the circulation of cars. Air transit is also suspended until the new date.
Ecuador’s shopping centers, closed due to the Covid-19 pandemic, will be able to operate again with a maximum of 30 per cemt capacity. Preventing the entry of people with a temperature greater than 37.5 degrees and the mandatory use of face masks to enter and transit will be part of the protocols that the main shopping centers in the country will require.
More than twenty malls from Quito, Guayaquil, Ambato, Manta and other cities disclosed the measures they intend to apply once they are authorized by the Government to completely restart their activities. The shopping centers are ready to open and have biosafety protocols to receive the public and reactivate commerce.
—– MEXICO —–
On 13 May, Mexico City’s government announce the plan for reopening the capital which indicates that offices and schools will not reopen until August while businesses such as bars and clubs as well as universities will not open until September. Some services, such as restaurants, department stores, religious services, and medical appointments, could restart as soon as 15 June but face occupancy limitations and sanitation restrictions.
Same store sales of the National Association of Grocery and Department Stores (ANTAD) fell 22.9 per cent during April. A significant drop derived from the closure in department stores and a decrease in self-service traffic. The Antad is made up of more than 62,000 stores and the total sales area of these establishments totals more than 23 million square metres. The results were due to a change in the type of consumption of consumers, which restricted their discretionary expenses only by acquiring basic necessities and an increase in savings.