[slideshow_deploy id=’1856′] Dominican Republic retail activity is one of the busiest in the Central America region. Gross domestic product at PPP for 2010 was estimated at $87.2 billion with real per-capita of $8,900 (PPP). GDP grew at 7.8% in 2010. Dominicans accounted for 9.9 million with over 2 million of them living in the capital city Santo Domingo, as of 07/2011 (Cia.gov). The Dominican Republic has a pro-business environment that welcomes international investment. One of the most significant recent events was IKEA’s entry to Santo Domingo in 2010, which was expected to raise the bar on the competition. AT Kearney’s 2011 GRDI report placed the Dominican Republic at number 28th, as the country continues to attract significant retail development. The Caribbean country did not make GRDI’s 2012 top 30.
Supermarket and shopping center activity in the Dominican Republic is very much alive. Jumbo hypermarkets and Nacional supermarkets lead grocery retailing in the country with 8% market share, Multicentro La Sirena comes in second at 7% market share, and the remaining universe is made of thousands of independent outlets. The two leading groups are the country’s hypermarket pioneers and offer a wide variety of products targeting different income segments of the population. Their success places high entrance barriers for modern grocery retailers, both domestic and international.The three newest retail projects are Sambil, Agora Mall, and Blue Mall. Luxury brands such as Louis Vuitton and Cartier, and mid-level Nike, Desigual and Timberland retailers are entering the country and turning Santo Domingo into the Caribbean’s shopping capital. IKEA’s entry to the Dominican Republic in 2010 represents the country’s first significant investment from a major multinational non-grocery retailer.
Ikea’s move generated a trend among major domestic players to remodel and expand their existing outlets as well as open new outlets. Furthermore, domestic retailers also refreshed their product offerings and undertook other actions aimed at limiting the negative effects on their businesses from IKEA’s landing in the country.
The majority of Dominicans fall in the mid-low and low income level. The implication for retail is that they most likely will focus on purchasing low to medium ticket items, with some occasional higher-end shopping. Modern retailers are likely to continue catering mainly to middle income, mid-high income and high income segments of the population. These consumer segments are expected to expand in the short term as favorable macroeconomic conditions remain to produce higher GDP growth, low unemployment rates and low inflation.
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