November 11, 20 - 9:59 am - Reuters

Brazilian retail sales grew 0.6% in September

Brazilian retail sales advanced 0.6% in September compared to the previous month and rose 7.3% over a year earlier, reported the Brazilian Institute of Geography and Statistics (IBGE) on Wednesday, showing rebounding signs after COVID-19 pandemic.

Retail sales in Brazil have been leveraged in recent months by the financial emergency aid from the government, as well as by the easing of social-distancing measures to contain the pandemic. Record low-interest rates also helped it.

However, since returning to the pre-pandemic coronavirus level in June, the sector has shown a loss of strength in sales – there were increases of 3.1% in August, 4.7% in July, 8.7% in June, and 12.2% in May.

“Trade has been less and less impacted by Covid-19 and the economy has a trajectory that begins to resemble pre-pandemic behavior,” said research manager, Cristiano Santos.

“(Still) there are other points such as lesser emergency aid in September. The slowdown is natural and represents accommodation,” he added.

Sales thus ended the third quarter with a gain of 17.2% over the previous three months, a record in the historical series started in 2000. This was after contractions of 1.9% in the first and 8.5% in the second quarter.

“It was a very strong quarter, which restored losses caused by the pandemic and taking trade to the highest level in the series,” added Santos.

In comparison with the same month of the previous year, sales grew 7.3%, and recorded stability in the accumulated result for the year, after six months in a negative field.

IBGE explained that in September, of the eight activities surveyed, five had positive rates in comparison with August: Books, newspapers, magazines, and stationery (8.9%); Fuels and lubricants (3.1%); Pharmaceutical, medical, orthopedic, and perfumery articles (2.1%); Office, computer and communication equipment and supplies (1.1%) and Furniture and household appliances (1.0%).

On the other hand, losses were recorded by Fabrics, clothing, and footwear (-2.4%); Other articles of personal and domestic use (-0.6%); and supermarkets, food products, beverages, and tobacco (-0.4%).

According to the IBGE, supermarket sales have been impacted by food inflation. In September, the food and beverage group posted a price increase of 2.28%, according to IPCA data.

The expanded retail trade, which also includes vehicles and construction materials, increased sales by 1.2% in September, the fifth consecutive month of increase.

Vehicles, motorcycles, parts and pieces sector registered a 5.2% growth, while in Construction Material, the increase was 2.6%.

The most recent Focus survey by the Brazilian Central Bank shows that the market expects an economic contraction this year of 4.80%, recovering with a growth of 3.31% in 2021.

(Translated by LABS)