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Investment opportunities report: Retail
The Uruguayan economy has shown a remarkable performance, growing fifteen years uninterruptedly. This growth was significantly above the regional average, reaching annual average levels of 4% in the last decade.
Publication date: 28/02/2018
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The Uruguayan economy has shown a remarkable performance, growing fifteen years uninterruptedly. This growth was significantly above the regional average, reaching annual average levels of 4% in the last decade.
This strong growth of the economy and the purchasing power of its population, together with political, economic and legal stability, has positioned Uruguay as one of the main destinations within the region for the most important international retail companies.
Uruguay has relatively high billing levels per square meter in the regional comparison, which is attractive for investments in the sector. Uruguayan consumers have shown a cultural change, adopting new standards of living, multiplying the range of goods they consume.
Private consumption grew at an average annual rate of 5% in the last decade. The other side of this continuous increase in household income and consumption has been a strong increase in commercial activity and sales.
Local entrepreneurs highlight the adaptability of Uruguayan labor, which is incorporated into new work schemes in very short periods of time. According to data from the Social Security Bank (BPS), the Commerce sector [2] occupies approximately 150,350 people in Uruguay (April 2017), which represents about 10% of the total number of employees in the country.
In recent years, important clothing brands have been established in Uruguay: Adidas, Forever 21, UnderArmour, Jeep Footware, MAC, Clarks, Aldo, Sarkany, Sodimac, Lojas Renner, among others. For its part, the Swedish fashion multinational H & M will be set up in the Uruguayan market in mid-2018.
Investment in the sector
Uruguay has an attractive investment promotion regime that grants tax benefits to companies that decide to invest in the country. In this sense, investors in the retail sector have frequently used this regulation. According to information from the Commission for the Application of the Investment Law (COMAP), more than 470 projects were promoted in the commerce sector, which totaled over US $ 475 million between 2008 and the first half of 2017 [3].
Tourism and commerce
The strong development exhibited by receptive tourism in Uruguay in recent years has had an important impact on the activity of businesses. In 2016, the number of people visiting Uruguay reached a new historical record, adding 3.3 million tourists and growing 12.3% compared to 2015.
In the first semester of 2017, the number of tourists increased 25% with respect to the same period of 2016. Foreign exchange revenue for tourism services was US $ 1,440 million, which represented 39% more than 2016. In 2016 the total expense of visitors was US $ 1,824 million and it is expected that by 2017 this figure will exceed US $ 2,000 million.
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[1] In the ranking of 2016 countries with excellent conditions for the retail business such as Uruguay, Qatar and Mongolia were not included as a new filter was added according to market size.
[2] All groups included in division 47 of the ISIC Classification Rev. 4 are included.
[3] The projects promoted by COMAP in the commercial sector and that also carry out retail sales (division 47 of the ISIC Classification Rev. 4) were considered.
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