The distribution network in Panama

Evolution of the Sector: Based on the World Economic Forum’s Global Competitiveness Report 2016-2018, Panama ranked No. 42 out of the 138 countries surveyed and is among the 10 most competitive economies in Latin American and the Caribbean. The Gross Domestic Product (GDP) growth rate is 5.4% for 2017, the highest in Latin America.

Food retail sales were $376.7 million in 2017. High growth categories include savory snacks, processed meats and seafood, sauces and condiments, ready meals, processed fruits and vegetables, dairy products, and snack foods. Supermarkets, traditional (mom & pops) hypermarkets and independent food stores dominate Panama’s grocery sector. Other popular retail formats in Panama include membership club stores, and wet markets located nationwide, which concentrate on domestic produce. The largest and most popular market is the “Mercado de Abastos”, located in Panama City.

Modern food retailers have been improving quality and convenience. Supermarkets, hypermarkets and independent food stores, which are most popular among consumers, mostly drive the grocery market in Panama. Supermarket chains are increasing their presence by opening new stores in populated areas across the country and offering online grocery shopping and delivery. Store brands are becoming prevalent in these chains and appearing on the shelfs of top supermarket, private labels give the chain a way to set themselves apart from the competitions and enable them to offer customers more choice. Independent grocery and convenience stores are also transforming their store-planning format, locating stores in convenient, generally neighborhoods; they number around 11,000. There are mini convenience stores, conventional size stores with expanded foodservice, and even hyper-convenience stores with the extensive variety of product offerings and in-store seating for foodservice
Market share: Panama City accounts on average for 65% of total domestic sales of consumer goods. The remaining 35% is divided between other major cities including David, Colón, Santiago and Chitré (ITA, 2021).

In Panama, the mass retail distribution structure is not too sophisticated: Direct importers either sell their merchandise in bulk or retail. Concerning mass consumption products (food and medicines), bulk and retail sales are done separately. Regarding industrial products, sales are usually conducted by exclusive local agents or distributors and sometimes the local firms buy directly through brokers or producers.

Regarding industrial products, sales are normally made by local exclusive agents or distributors. In other cases, local companies order directly from foreign brokers or the manufacturer.

Some of Panama's main importers are also regional distributors for Central and/or South America, with storage facilities located in the Colón Free Zone (CFZ). In general, importers/distributors of CFZ have affiliate stores in Panama City for retail sale in the local market.

Most of the Panamanian trade goes through the ports of Manzanillo, Cristobal and Evergreen on the Atlantic Coast, as well as the port of Balboa on the Pacific Coast. Tocumen International Airport handles most of Panama's air cargo.
Retail Sector Organisations: Retail organization of Panama
Ministry of Economy and Finance of Panama
Panama Chamber of Commerce

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