Driven by the expansion of shopping malls, promotions and discount prices at supermarkets and pharmacies, and a growing middle class, Peru’s retail industry has lead growth in the Latin American market in recent years. According to consulting firm AT Kearney, between 2002 and 2015 Peru’s retail sector transitioned from a burgeoning market to one in which customers actively seek out organised formats, global brands and developed retail shopping districts. As forward momentum continues, consumer demand is making the sector attractive to investors. According to AT Kearney’s 2017 Global Retail Development Index, Peru ranked 9th out of 30 global emerging markets and first in Latin America in terms of retail investment attractiveness.

Supermarkets and department stores continue to record sales growth, a number of shopping mall projects are scheduled to open over the medium term and stakeholders are eager to embrace new formats. Additionally, customers are becoming more accustomed to online purchases, propelling Peru’s e-commerce sector to one of the fastest growing in the Latin American market in 2018. It is expected that as Peru moves into a more mature stage of retail development, it will continue consolidating and reorganising its offerings as local competition becomes more sophisticated.

Structure & Oversight

Traditional shops, such as family-owned markets, pharmacies and hardware stores, still dominate the industry, accounting for 70% of retail sales. Modern retail establishments, including supermarkets, department stores and pharmacy chains, accounted for the remaining 30%. There were over 7000 formal companies operating in the retail sector in 2018, 202 of which employed over 50 people. The number of people employed in formal retail jobs grew by about 2.75% year-on-year (y-o-y) as of June 2018, while payroll was up almost 6.4% over the same period.

As the sector progresses, modern retail is expected to comprise a larger share of total sales, driven by increased household income, and its capacity to offer promotions and lower prices. “The industry is striving to not only provide good service and a wide variety of quality offerings, but also to develop brand loyalty,” Mario Campodónico, general manager of the supermarkets division at Cencosud Perú, a subsidiary of Chilean multinational Cencosud, told OBG. Such conditions saw the sector successfully weather the effects of a challenging political environment in 2018 and an economic slowdown in 2017.

Despite the positive outlook, the sector is not without its challenges. Government over-regulation remains an issue as Peru lacks both a designated regulatory agency and an umbrella policy to guide sector activities. In the World Economic Forum’s “Global Competitiveness Report 2018”, Peru ranked 128th out of 140 countries in the burden of government regulation category.


In 2018 the retail sector grew by 7.2% to reach a total value of PEN6.9bn ($2.1bn), according to the Ministry of Production. This follows an average annual expansion of 7.1% over the 2013-17 period. The fastest-growing segments in 2018 included furniture, which was up by 12.6%, followed by clothing and footwear (9.1%), pharmaceuticals and cosmetics (8.2%), and household appliances (3.2%).

A number of factors bode well for the industry. Peru’s low-risk business risk environment, high market attractiveness and low market saturation provide ample opportunities for investors. According to the Ministry of Economy and Finance, and the Association of Shopping and Entertainment Centres of Peru, it is estimated that investment in the retail sector will grow by 30% between 2017 and 2019, to reach PEN879m ($266.1m), based on the number of shopping centres expected to open between 2018 and 2020. Of this, PEN475m ($143.8m) will go towards building new shopping areas, while PEN404m ($122.3m) is set aside for extensions and the remodelling of existing spaces.

Large Stores

Retailers have traditionally relied on supermarkets and department stores to sell food and household items. An analysis of the retail sector published by the Ministry of Production showed that in the third quarter of 2018 sales activity in the segment grew by 7.3% y-o-y to reach PEN1.7bn ($514.6m), accounting for around 55.5% of total sales activity. Food was the largest category of products sold at supermarkets and department stores, making up 35.2% of sales, followed by clothing and footwear (19.4%), miscellaneous goods (17.9%), household products (12.9%), pharmaceuticals and cosmetics (7.7%), and drinks and tobacco (6.9%).

Changing Patterns

However, new formats, including convenience and cash-and-carry (C&C) stores, are emerging as retailers seek to increase market penetration and adapt to the purchasing patterns of local consumers. Convenience stores are the fastest-growing segment, with the number of individual outlets expected to grow from 374 in 2017 to 2145 in 2022, mostly concentrated in Lima. Peru’s leading convenience store, Tambo, is expected to open 600 units by 2021, while Mexican chain Oxxo has set a target of opening 500 stores in Peru by 2021. Peruanos Supermarket opened its Justo y Bueno convenience store in March 2018 and plans to proceed with 25 more units.

While C&C shops represent less than 3% of the retail market in Peru, the segment also poses potential investment opportunities. The largest market participant was Makro, with 12 C&C shops at end-2018, followed by Vega with nine and Mayorsa with seven shops. Peruanos Supermarket has also diversified into this format, opening three stores in 2018.

Shopping Malls 

As of June 2018 there were 98 shopping malls in Peru. The highest concentration is in Lima, which is home to 53 facilities. In the first half of 2018 Lima and Callao malls registered a vacancy rate increase of 0.9% in regional malls and 1.4% in lifestyle malls compared to the last half of 2017.

An estimated 15 new shopping centres are expected to open across Peru by 2023, according to the Lima Chamber of Commerce’s Institute of Economics and Business Development, with retail chains and investment groups providing over $1bn in funding. Set to open in October 2019 in the district of Ate, the Real Plaza Puruchuco will boast 125,000 sq metres of retail space, and house over 400 shops, 20 restaurants, a gym, an educational institute and an outdoor green space. The facility is being built by Canada’s Intercorp Group with an investment of PEN480m ($145.3m) and is expected to earn PEN1.2bn ($363.2m) in annual sales.

In 2020 Falabella Group’s $60m Mall Plaza Cusco will open adding 55,000 sq metres of leaseable area. The development will house five restaurants and 35 shops, bringing brands such as Saga Falabella and H&M to the area. Meanwhile, the group’s PEN366m ($110.8m) Mall Plaza Comas will become the first shopping mall in Peru with a Leadership in Energy and Environmental Design certification for meeting sustainability requirements and eco-efficiency standards.

According to local media, Mall Aventura announced in March 2019 it would construct three new malls in Iquitos, Chiclayo and San Juan de Lurigancho for a total investment of $224m. Expected to open in 2021 with 55,000 sq metres of leaseable area, the $70m Mall Aventura Iquitos will be the first commercial centre built in the city, while more than $66m will go towards funding the construction of the mall in Chiclayo, which begins in April 2019. The latter facility will boast 100 stores, a gym, a food court and restaurants. The $88m Mall Aventura San Juan de Lurigancho is planned to open in 2021 with 61,000 sq metres of leaseable area and is expected to attract over 1.7m people per year.


E-commerce has established itself as a fast-growing market segment. In 2018 Peru’s e-commerce sector registered one of the highest rates of growth in Latin America, with online purchases rising by 30.2%, according to a report from the International Data Corporation. A 2019 e-commerce study published by online retailer Linio showed that Peru generated $4bn in e-commerce sales in 2018, making it the fourth-largest market in South America, behind Brazil ($19bn), Chile ($5bn) and Argentina ($4.3bn).

Recognising the segment’s potential, traditional retailers are working to implement digital avenues to promote online sales. “E-commerce can improve the efficiency and relationships between different members along the value chain,” Campodónico told OBG. “We aim to boost channels that are complementary to digital services, supported by tailor-made tech solutions.” E-commerce’s biggest challenge, however, will be tapping emerging neighbourhoods in Lima and rural provinces where store-based retailing is prominent, partly because of a lack of digital infrastructure.

Year Ahead

The growth observed in retail sales in Peru is based on the market’s capability to adjust to consumer demands, whether that is through increasing store-based retailing or e-commerce. The retail sector is shoring up competition by expanding and strengthening its various formats, while stakeholders are prioritising maintaining current customers, improving offerings and taking advantage of the growing middle-class consumer base. “The expectation for 2019 is that public and private sector interests will contribute to the development of proposals that increase the country’s competitiveness,” Campodónico told OBG.