Brazilians’ purchasing intention this Christmas plunges 24%; highest drop in 5 years

RIO DE JANEIRO, BRAZIL – Brazilians’ lower purchasing power, undermined by inflation of 10% this year combined with high interest rates and unemployment, depressed purchasing intentions for Christmas, repeating the pattern seen on Black Friday.

Of 28 products surveyed, including food and ornaments typical of this time of year, electronics, appliances, furniture, computer items, cell phones and clothing items, only 5 showed an increase in purchase intentions compared to Christmas 2020, according to a survey conducted by the Brazilian Institute of Retail Executives’ (IBEVAR) V+ platform.

The survey used artificial intelligence algorithms and semantic analysis. Through these tools, data from 100,000 spontaneous expressions on social networks were collected this month.

Among the 5 products that recorded an increase in purchase intentions are microwave ovens (3%), drones (31.2%), electronic games (42%), video game consoles (70%), and crockpots (270%).

The remaining 23 items fell by up to 40% in purchase intentions, such as cell phones and smartphones, followed by headsets (38.2%), bicycles (33.8%), TVs (30.1%), and tablets (29.5%).

The data collected shows an average 24% decline in purchasing intentions for the 28 items. It is the largest downturn observed in the Christmas consumption intention survey since 2016 (7%). Last year, the drop reached 5% compared to Christmas 2019.

“It is no surprise that Christmas this year is very poor, just as Black Friday was,” says economist and IBEVAR chairman Claudio Felisoni de Angelo. He argues that the context is unfavorable for shopping, with 13.5 million unemployed in Brazil, trade interest rates of 80% a year, inflation at 10%, uncertainties, and a troubled political scenario.

BLACK FRIDAY

This year’s Black Friday posted a far greater drop in consumption. The same type of survey indicated a 32% drop in purchasing intentions for the date compared to the previous year. This perception was later confirmed by data from Eletros, an association comprising consumer electronics manufacturers, which showed a decline of up to 30% in sales.

According to Felisoni’s analysis, in addition to the negative macroeconomic factors for consumption, many durable goods have been recently replaced, such as cell phones and home appliances. Therefore, there is no incentive to exchange them.

In the case of the 5 products that still spark buying interest this Christmas, the economist notes that they reflect changes in habits caused by the social isolation enforced by the pandemic. “People began to cook more at home and engage in leisure activities, hence the increased interest in crockpots and gaming consoles.”