Brazil: economic recovery allowed more than 200,000 stores to open in 2021

RIO DE JANEIRO, BRAZIL – Brazil’s economic recovery in 2021 after the severe crisis generated by the covid pandemic in 2020 allowed the opening of more than 200,000 new stores in Latin America’s largest economy last year, the National Confederation of Commerce (CNC) reported Monday.

According to the employers’ association, the number of active commercial establishments in Brazil jumped by 9.3% in the last year, from 2.2 million at the end of 2020 to 2.4 million in December 2021, with the opening of 204,400 new businesses.

The Confederation said the number of retail businesses created in 2021 doubled the nearly 75,000 that closed in 2020 when restrictions imposed to cope with the pandemic forced many retailers to abandon their projects.

The Confederation attributed the sector’s good performance to lifting restrictions to covid imposed in 2020 that limited the operation of trade and the mobilization of consumers.

“The easing of restrictions imposed on trade in the various states and municipalities, especially at the end of the second wave of the pandemic, as well as the progress of vaccination, contributed to a trend of increased movement of consumers and certainly stimulated the movement of reopening of commercial establishments,” said the president of the CNC, José Roberto Tadros, quoted in a statement from the entity.

The rebound was also made possible by Brazil’s economic recovery last year, driven mainly by increased consumption.

According to data released last Friday by the Government, Brazil’s economy grew by 4.6% in 2021, its most significant expansion in the last 11 years, after the historic 3.9% drop suffered in 2020 due to the pandemic, which was the largest retraction in 24 years.

The solid gross domestic product (GDP) growth last year was driven mainly by the recovery of the services sector, which includes trade, and grew by 4.7%.

Trade sales, meanwhile, advanced 1.4% last year by volume over 2020.

“Despite the low comparative base in 2020, economic difficulties caused by high inflation, rising interest rates, and a paralyzed labor market, the sector managed to raise its turnover in real terms,” according to the statement.

According to the CNC, Brazilian trade turnover grew by 4.5% in 2021 in real terms (already discounted for inflation), its highest annual increase since 2018. In 2020, sales had fallen by 1.4% in real terms values.

According to the employers’ association, among the new businesses that emerged in 2021, 77.4% (158,230 stores) corresponded to microenterprises and 14.7 % (29,990) to small businesses.

The activities that generated most new businesses were supermarkets and mini-markets, with 54,000 stores, household utilities and electronics stores (38,700), and clothing, footwear, and accessories (28,300).

With information from EFE

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