by Camila Moreira
SAO PAULO (Reuters) – Brazilian retail recorded the third consecutive drop in sales in August and hit the lowest level of the year, still skating amid a scenario of inflation and high interest rates.
In August, sector sales contracted 0.1% compared to the previous month, according to data released this Friday by the Brazilian Institute of Geography and Statistics (IBGE).
The result was slightly better than a Reuters poll forecast for a 0.2% drop, but led to sales accumulating a 2.5% loss in three straight months of negative rates.
In comparison with the same month of the previous year, however, sales showed a better performance than the expectation of stability, growing by 1.6%.
The performance of the Brazilian retail sector has been skating in recent months in a scenario of credit crunch and caution with inflation. Although the IPCA registered the second month of decline in consumer prices in August, this was mainly due to the impact of lower fuel costs.
Although the August result has positioned trade at the lowest level of the year, sales volume is still 1.1% above the pre-pandemic level of February 2020, but 5.2% below the highest point in the series, in October 2020.
“The trajectory … after the pandemic is still very volatile”, explained the research manager, Cristiano Santos.
Among the eight activities surveyed, three had a retraction: Pharmaceutical articles, 0.3%; Office, IT and communication equipment and materials, 1.4%; and Other articles for personal and domestic use, 1.2% – the last two, according to Santos, have gained relevance in the analysis of results due to the negative performances in recent months.
The survey manager also highlighted that the 0.2% increase in sales of Hiper, supermarkets, food products, beverages and tobacco served as an “anchor factor” for the month’s result, holding the total result close to zero, since which weighs about 50% in the global index.
On the other hand, the activity of Fuels and lubricants showed growth of 3.6%, after an increase of 12.6% in July. “The reduction in fuel prices led to a 4.5% drop in nominal revenue, which was offset by a 3.6% rebate in volume. In July, this rebate was greater, because the reduction in prices was also greater,” said Santos.
Expanded retail trade, which includes vehicles, motorcycles, parts and pieces and construction material, fell by 0.6%. That’s even with the advance of 4.8% in the month of Vehicles, motorcycles, parts and pieces. Construction materials showed a 0.8% retraction in sales.
“Activity dropped 4.5% from May to June and 2.7% from June to July, so the August result is still not enough to return to the level prior to these two months of decline,” said Santos, explaining that this result reflects a drop in vehicle prices.
The performance of retail in the country follows that of industrial production, which in August fell again, by 0.6%, still struggling to take off and resume pre-pandemic levels.
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