Santiago, Dec. 6 - Chilean retailers have launched a campaign to expand throughout the region and Latin America's biggest players in the sector have set their sights firmly on top markets Brazil and Mexico, analysts said.
Ripley Corp, Chile's third-largest retailer, announced a deal this week to create a new retail company with Mexico's upscale department store chain Palacio de Hierro.
The two are creating a company in which Palacio de Hierro will hold 52.5 percent and Ripley the rest as they open stores in Mexico that will also offer credit cards and some financial services.
The planned investment is for $400 million over the next four years.
"Chilean retailers are being very aggressive and are at a point where they are thinking on a regional scale. They are well equipped for the task, with the right financial foundations and good levels of efficiency," said Elizabeth Palma, an analyst with the Tanner brokerage in Santiago.
Ripley already has stores in Chile and Peru.
Falabella, Chile's leading diversified retailer, has stores in Argentina, Peru and Colombia and is waiting for regulators to clear a merger with the nation's top supermarket chain D&S that will make it Latin America's second-largest retailer after Wal-Mart de Mexico (Walmex) .
Cencosud, another Chilean retail giant and which foresees 2008 sales of $9.5 billion, has its eyes on Mexico's fourth-largest retail chain, Gigante.
Last month the Santiago-based company bought Brazil's fourth-largest retail chain GBarbosa and it plans to enter the Colombian market in 2008.
"There is a battle going on among Chile's large retailers to open new markets," said Rodrigo Sarria from the Intervalores brokerage. "Chilean retailers are going into Colombia, Peru, Brazil and now Mexico, taking advantage of their know-how."
The move to other markets is timely for retailers in Chile, where fierce competition has shrunk growth opportunities.
Cencosud runs supermarkets, department and home-improvement stores and even banks, and has units in Argentina.
It is currently working with the French group Casino to expand into Colombia during 2008.
"Internal growth opportunities (in Chile) for local retailers are few and it's logical that they are looking at other markets with big growth potential and which are less concentrated," Sarria said.