FOOD, HBC IMPORTS ARE GAINING

MARK TOSH

GUADALAJARA, Mexico -- Imported products, especially food and health and beauty items, are gaining market share from locally produced products in Mexico, according to an industry survey of the market.

Imported food represented 14.4% of all food sales in Mexico last year, a substantial increase from the 9.9% share imports had in 1991, according to the National Retailers Association of Mexico, or ANTAD. Imported HBC products represented 12.4% of the category in 1993, compared with 7.6% in 1991.

The retail sales statistics for Mexico, which were compiled by A.C. Nielsen Co. for ANTAD, were released at the association's annual convention here last month. About 15,000 visitors attended the three-day show.

Overall, imports represented 10.7% of all Mexican retail sales in 1993, up from 7.4% in 1991, ANTAD said. In the household goods category -- which includes detergents and other nonedible items -- imported items represented 5.2% of all sales last year, compared with 2.8% in 1991.

"There is no doubt there has been an important growth for imported items in some sectors," Luis Santana, executive president of ANTAD, told attendees at a convention workshop. Still, he said, on a national level, imports represent only about 10% of all retail sales.

"It's obvious imported goods will have a greater place in the stores of our ANTAD members," he said. "This is natural in an open economy, where the level of imported goods can reach 50%."

The Nielsen statistics did not attempt to determine from which countries Mexican distributors were importing the products.

Growth for imported goods is expected to continue this year as a result of the North American Free Trade Agreement, which went into effect Jan. 1. The NAFTA agreement created a common market among Mexico, Canada and the United States through a gradual elimination of trade barriers.

Raul Garcia, an ANTAD project director, said the association does not foresee a "spectacular jump" for imports as a result of NAFTA, in part because Mexico had been relaxing its import rules for several years leading up to NAFTA.

Still, Garcia said, there should be further growth for imports in the years to come.

Other findings in Nielsen's research included:

· The peso value of retail sales -- including both national and imported products -- increased 20% from 1991 to 1993. In the same period, imported products achieved a 73% sales gain in terms of their peso value.

· The number of stores with front-end scanning equipment totaled 475 in November 1993, almost double the number that had scanning a year earlier. About 680 Mexican stores are expected to have scanning by December 1994, and those stores will account for an estimated 60% of all retail sales.

· The sales surge for imported products was not limited to Mexico City and the northern region. Sales of imported items represented 8.3% of 1993 retail sales in southern Mexico. Economic development in southern Mexico is generally considered to trail the more prosperous northern sector of the country.

· Although retail sales are increasing, the value of retail inventories declined in 1993 for the third straight year. This decline shows retailers are managing inventories better, ANTAD said.

· Same-store sales at Mexican retail outlets increased just under 2% in 1993. Overall sales increased about 10% to 12% because of an increase in the number of new-store openings.

A separate Mexican market survey, by Donnelley Marketing, found a continuous increase in the percentage of money that manufacturers spent on trade promotions with retailers since 1981. Manufacturers' trade spending with retailers represented 50% of their spending in 1991, compared with 34% of all promotional spending in 1981.

At the same time, the percentage of manufacturer spending on advertising has declined from 43% of all promotional spending in 1981 to 25% in 1991. In-store promotion to the consumer has held a relatively steady share of manufacturers' trade spending in the 10-year period, about 25%.