Chile retail will struggle as COVID-19 hastens change

Significance

Chile’s retail sector is reeling from the successive impacts of the social unrest that erupted in late 2019 and, since March, the COVID-19 pandemic, which has also affected the operations of its larger players in other countries. Even before these two events, the industry was struggling to adapt its business model to changing consumer habits.

Impacts

• Even if domestic demand increases by 7.7% in 2021, as the Central Bank anticipates, it will remain well below its level in mid-2019.
• Retail is among the sectors where most jobs have been lost during the pandemic, affecting women in particular.
• Shopping malls may emerge as especially vulnerable to a likely reduction in the return on retail real estate assets.