RIO DE JANEIRO, BRAZIL – With the expected growth in year-end sales, retail in Brazil is experiencing its best moment since the recession, and enters 2020 with its best foot forward.
The good performance achieved in 2019, particularly in the second half of the year, boosted the sector, which invoiced 18.1 percent more on Black Friday this year than in 2018.
The increase is influenced by macroeconomic factors that have a direct impact on income, such as the release of resources from the Severance Premium Reserve Fund (FGTS) – which, according to the market, will help the Brazilian economy experience its best year-end since 2014. Another factor was the drop, albeit mild, in the unemployment rate, which closed at 11.2 percent in the quarter from September to November, led by the increase in informality.
Amid this scenario, the Brazilian Institute of Retail and Consumer Market Executives (IBEVAR) projects that retail sales trend for December increased by 96.85, in the index on a fixed basis up to 100 – an increase of 3.74 percentage points over the same month last year.
For the start of 2020, the institute estimates an even greater variation, of (+0.38) each month in sales for the first two months of the year, (97.23) January and (97.61) February.
The positive figures, however, are still viewed with concern by part of the sector – suggesting that growth projections do not reach the retail market as a whole.
The 9.5 percent increase in Shopping Mall sales at Christmas disclosed by the Brazilian Shopping Center Tenants Association (ALSHOP) is contested by the Brazilian Satellite Tenants Association (ABLOS) with the argument that the 2019 Christmas sales were equal or worse when compared to 2018 for 70 percent of the associated small and medium-sized retailers.
According to Nuno Fouto, IBEVAR’s research director, despite the controversy, the current context shows a sustainable upturn for the sector considering the retraction experienced in recent periods.