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Retail Sales To Continue Improving During Rest Of Year
Higher sales of nonessential items indicate consumer confidence is back
By TAINA ROSA
July 8, 2004
The Commerce Development Administration said retail sales Puerto Rico have increased more 7% since January, and they should continue improving through and beyond.
Total retail sales are projected to exceed $16.5 billion this year and to reach $25 billion by 2011, according to research Estudios Tecnicos and the Puerto Rico Planning Board.
This increase is expected to be aided by sales nonessential itemsthose items which consumers usually postpone purchasing until the economy swings back into shape. Apparently, time is now. We can conclude from the trend in retail that local consumers feel pretty confident about the economys future, and so they dare purchase products that are relatively expensive as motor vehicles and other items that arent indispensable," wrote economist Luis Rodriguez Baez of Estudios Tecnicos in an article for Perspectivas, the firms newsletter.
"The economy has definitely continued to show signs of picking up," said Epifanio Fabregas, vice president of the Sembler Co. "You can tell just by looking at how traffic and sales have been increasing at shopping malls. We have also noticed that potential tenants are increasingly interested in doing business."
What is interesting is that these sales gains have been happening despite price increases in practically all sectors. The Labor & Human Resources Department reported that Aprils consumer-price index (CPI) was 9.9% higher than in the same month in 2003. The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services.
From March to April this year, the CPI rose 0.8%. The categories with the highest price increases were transportation (up 1.5%), food & beverage (up 1.2%), and medical care (up 0.2%).
Some in the retail industry believe the elections could slow sales a bit. However, Atilano Cordero Badillo, president of Supermercados Grande and the Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym), said the political campaigns will result in a greater flow of money.
"An estimated $30 million will be spent on election campaigns this year. That money will fuel an increase in various business sectors, including media, transportation, and publishing, benefiting the economy as a whole," he said.
Cordero Badillo added that he believes proposed antibusiness legislation wont have a negative impact on the local economy because it wont be passed. In fact, as of press time, the House and the Senate had rejected bills that would have granted vacation and sick-leave benefits to part-time employees. The consensus in the retail industry was that these and other proposed bills would increase the cost of doing business in Puerto Rico, which would scare away investors and ultimately hurt local consumers.
This Caribbean Business article appears courtesy of Casiano Communications.