Retail activity in Brazil remains above pre-pandemic levels

Brazilian retail activity remains above pre-pandemic levels despite a drop in sales in the last two months, the Brazilian Trade Confederation (CNC) of Goods, Services, and Tourism reported Tuesday.

According to the CNC report, retail sales in Latin America’s largest economy fell 1.4 and 0.4 percent in June and May, respectively.

The sector’s activity level remains 1.6 percent above the level of the month before the outbreak of the health crisis, despite the decline in people’s mobility.

The CNC recalled that the Brazilian retail market contracted 18.9 percent in the first two months of the pandemic, but the losses in the following two months were mitigated by the economic support provided by the government.

Subsequently, the retail recovery was supported by the easing of restrictive measures in the second half of 2020.

“Since then, the evolution of sales has fluctuated according to the evolution of consumer conditions and the severity of the health crisis,” the CNC said.

The evolution of retail sales has shown a more intense recovery in the country’s northern states, as São Paulo and Rio de Janeiro have a greater lag in consumer mobility and concentrate 37 percent of cases of the new coronavirus in Brazil.

The situation is explained by the fact that these states have more developed logistics, which favors the process of digitalization of consumption.

According to a study by the consulting firm Neotrust, the Southeast accounted for 65 percent of Brazilian e-commerce in 2020, as opposed to the North, which accounted for only 2 percent that year.