Retailing in Honduras saw some recovery in 2021 as COVID-19 restrictions were lifted, with modern grocery retailers faring the best. However, a combination of the pandemic and tropical storms in 2020 damaged the economy and led to declining disposable incomes.
The retail market in Honduras experienced some recovery in 2021 after the confinement measures were lifted. Normal activities began to resume outside the home which also stimulated purchases via bricks and mortar stores.
Honduran consumers shop at least once a week at local markets and once or twice a week in supermarkets and hypermarkets, depending on their income level. Most, however, prefer to shop locally.
In 2021, the general state budget prioritised the reconstruction of infrastructure damaged by tropical storms Eta and Iota, as well as economic reactivation. The health sector was also prioritised, with an increase in its allocated budget of 13% over the previous year.
Distributors are generally efficient and wide-reaching in Honduras, benefiting retailers with their breadth of range. Retailers enjoy the wide variety of brands and products available and the ability to phase their volume orders according to seasons.
Rural to city migration has evolved over the years and is now a severe problem because of the government’s inability to produce sufficient formal employment for the economically active population. As such, the informal market in Honduras is fairly large.
Ongoing poverty, malnutrition and the country’s vulnerability to natural disasters and climate change will have an impact on retailing going forward. Drug cartels, which also exert considerable influence in the country, a high murder rate and government corruption, are set to continue blighting the country’s prospects, and will continue to force small retailers out of business.
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Retailing
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
See All of Our DefinitionsThis report originates from Passport, our Retailing research and analysis database.
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