Why this is important to Wisconsin businesses: Increasing disposable income means Mexican consumers have more to spend on decorating for holidays.
Within Mexico’s party and seasonal decorations industry, the companies holding the largest market share include Wal-Mart Mexico, Party Land, Party City and Sam’s Club. Mexico’s consumers also buy their seasonal decorations from local markets, such as Mercado de Sonora (http://mercadosonora.com.mx). This market houses more than 100 stores with products for parties and seasonal decorations and street vendors.
Consumers in Mexico do not decorate as much, on average, as those in the U.S. Decorations in Mexico are mostly for special celebrations related to religious customs such as baptisms, confirmations, first Communions, weddings and birthdays. Seasonal decorations are not that important. Operators in the seasonal decorations retail market sell seasonal decorations, most of which symbolize significant holidays or events, such as Independence Day, Day of the Dead and Christmas. This industry includes sales from all major retail channels, including specialty stores, department stores, large supercenters and internet retailers.
Industry operators have had much to celebrate during the last five years. Per capita disposable income has increased at an annualized rate of 1.5% during the period, leading consumers to spend more on industrial goods, which are primarily discretionary in nature. Overall, industry revenue is expected to increase at an annualized rate of 2.7% over the next five years to total $20.6 million.
Mexico’s theme party decorations market is segmented mostly by birthday parties versus seasonal decorations for Independence Day, Day of the Dead and Christmas. Theme parties are only popular among people of high income or organized by bars and discos on special holidays. Most seasonal decorations are themed around specific holidays, such as Christmas and Halloween. Families with children are likely to celebrate these holidays by decorating the interiors of their residences, more so than the exterior, with industry products. The segment of the population aged 10 to 19 is experiencing stagnant growth, presenting a potential threat to the industry.
High disposable income increases the ability of households to spend freely on discretionary goods, driving up overall demand in this industry. While consumers still purchase seasonal decorations during periods of low disposable income, consumers spend less per trip when disposable income declines. Per capita disposable income is expected to increase in 2019, designating this industry as one with opportunities for Wisconsin companies.