Christmas Sales Up 11% Over 2008

By Carlos Graffigna, Contributing Reporter

As the world economy continues a slow recovery from the dismal 2008, Christmas sales at shopping centers in Brazil had a healthy holiday season. According to ALSHOP (the Brazilian Association of Shopping Center Stores), retail sales had a nominal increase of 11.26 percent, a net increase of seven percent on December 2008 with inflation adjustments taken into consideration.

These solid numbers were also reflected in an increase in seasonal jobs offered with 140,000 people hired this year up from 113,000 in 2008. Overall, sales at shopping centers for this calendar year should reach R$78.8 billion, up ten percent on 2008.

Last year, as global financial meltdowns hit the world’s economies, Brazil presented a 3.5 percent net increase in sales during the holidays, but the number was below expectations and inventories were left unsold, causing retailers to drop prices on most items in order to sell products which can quickly get outdated. In contrast, sales were so good this year that many stores ran out of merchandise.

Nabil Sahyoun, president of ALSHOP, said of the 2009 season; “We had problems with inventory, especially with electronics, retailers had a hard time replacing sold merchandise”. The electronics sector in particular had a healthy increase in sales, up 30 percent from last year, largely thanks to lower taxes equaling lower shelf prices.

The lack of replacement products may be attributed to conservative managing of inventory by stock controllers. Even though last year sales were far from slow, post holiday bargain sales were strong.

This year, concerns over moving products before they become outdated look unlikely to be as important. In any case, even though there may not be the variety of products available in this year’s sales, bargain hunters will still have a wide variety of merchandise and low prices to choose from.

But it was not all festive cheer as, right in the middle of business on Christmas Eve, communication problems with Redcard (who look after transactions for MasterCard, Diners Club, Maestro and RedeShop) had both shoppers and store personnel upset.

Roque Pellizzaro Júnior, president of CNDL (National Association of Store Administrators) said “the problem brought incalculable damage” and characterized the system as “fragile”. Furthermore, the CNDL is now studying the possibility of collective legal action for damages against Redcard.

But even with Redcard’s issues and the lack of some replacement products, the holiday shopping season has still been considered a complete success and Mr. Sahyoun is glowing with optimism, prompting forecasts of 18-20 percent growth in the sector next year and an historic 25 percent increase in sales during the 2010 holiday season.