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The vibrant culture of Mexico spans from centuries is widely-known for their colorful celebrations. Cinco de Mayo itself is one of the most prideful moments Mexico’s people cherish through dances, music, and parades – a tradition that persists to this day.
Mexico is a nation of home owners, with 25.1 million households living in owner-occupied accommodation in 2016. In contrast, 4.1 million households were living in rented accommodation and a further 4.1 million had other forms of tenure. Despite house prices having risen by 32.5% between 2011 and 2016, the number of home owners increased by 10.6% while the number of renters declined marginally.
Self-build, single-family homes (often financed by remittances) remain the housing norm. These dwellings are often constructed piecemeal over an extended period and expanded on an ad-hoc basis. However, the increased availability of mortgage finance is beginning to change this pattern, with the number of owner-occupied households with a mortgage rising by around one-third, reaching 6.9 million in 2016.
Just more than 41% of households owned a dog as a pet in 2016 while 16.4% owned a cat. Middle-class households are increasingly pampering their pets, reflected by per household value sales of pet care products and services rising by 35.7% (in real terms) between 2011 and 2016, reaching MXN1,120 in 2016. According to a 2014 article in the Los Angeles Daily News “Over the last decade, the growth of Mexico’s middle class has created a new market for fancy goods and services for dogs, including clothing and accessory boutiques”. Heladogs (coined from ‘helado,’ the Spanish word for ice cream), a shop selling ice cream for canines, opened in Mexico City in 2016.
There was a gaping urban-rural income and spending divide in 2016, with per household consumer expenditure reaching MXN339,282 in urban areas and MXN55,231 per household in rural areas. There is also a north-south divide, as northern states have been the main recipients of foreign direct investment and, in turn, wages tend to be significantly higher there than in the less-developed south.
According to the 2015 Mexico Financial Diaries, participants in the study “rely more heavily on credit than savings to bridge gaps in income and to acquire assets… Rural households in Oaxaca receiving the Prospera government social transfer tended to take food on credit with local shop owners over making large repayments as soon as they received their benefit. In the Mexico City site, respondents bought goods like appliances, furniture, and even shoes and clothing on monthly instalment plans, sometimes committing a significant share of their income to instalment payments”.
A study conducted by FT Confidential Research in 2015 revealed that just 53% of consumers have access to what it called ‘modern trade’, which includes supermarkets, hypermarkets and department stores. The rest shop mainly “in the 800,000 or so changarros [small traditional grocer retailers] that dot the country”. In 2016, traditional grocery retailers accounted for 51.6% of value sales of packaged food, with modern grocery retailers accounting for 43.2%.
Brands are important to Mexican shoppers, with private label products accounting for only 2.1% of value sales of packaged food in 2016. In part, this reflects a lack of availability of private label products. Moreover, according to a study by consultancy PwC in 2015, as many consumers have limited disposable income they tend to be risk averse when making purchases, and they hesitant to buy new private label products to replace those that they already find satisfactory.