The Mexican retail sector is projected to grow at a compound annual growth rate (CAGR) of 5.3% from 2023 to 2031, driven by economic recovery and increasing consumer confidence, according to an OMR Global report.

As disposable incomes rise, Mexican consumers are investing more in clothing, health, and beauty products. This trend underscores the growing importance of beauty and personal care products in the Mexican market, where established brands are highly valued for their reliability and trustworthiness, according to the report.

Retail expansion is a significant driver of growth, with many retailers targeting smaller cities that have lower retail outlet density. This strategy aims to enhance brand visibility and reach new markets. Notably, Alert Innovation, a leader in e-grocery fulfillment automation, was acquired by Walmart in October 2022, and Dollar General entered the Mexican market in December 2021. Such expansions by prominent vendors are expected to significantly boost the retail market.

Innovation in packaging and marketing is another trend shaping the Mexican retail market. Retailers are employing various strategies to differentiate their products in a highly competitive environment. These strategies include innovative packaging, online campaigns, contests, blogging, social media programs, and celebrity endorsements. Packaging plays a crucial role in product differentiation and consumer attraction. Significant investments in appealing and innovative packaging strategies are expected to drive market growth.

The offline distribution segment is anticipated to experience substantial growth during the forecast period. This segment remains the most effective mode of distribution, offering consumers a touch-and-feel experience, which is a crucial aspect of marketing in the retail sector.