...Mexico's Recovery Should Boost Sales Fitch Ratings expects GDP growth of 3% in 2014 and 3.8% in 2015, following the below-average growth of 1.1% in 2013. Though supermarkets' same store sales (SSS) have dipped into negative territory over the last few months, they should strengthen. This increase in economic growth should become more generalized toward second- half 2014. Supermarkets Face Headwinds Mexico's consumer confidence index remained at its lowest levels since 2011. Lower disposable income due to the fiscal reform, which, among other things, included hikes in individual income tax rates for mid- to high-income taxpayers and in energy and fuel prices, should dampen overall consumer demand for goods and services. This has negatively impacted national and regional retailers. Furthermore, excise taxes on both beverages sweetened with sugar and/or fructose and high-calorie foods are affecting sales volume of these products. Thus, improving SSS remains the main challenge for supermarkets....
