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Snail growth in Brazil's 2014 retail sales anticipate a very tough 2015

Friday, February 13th 2015 - 09:13 UTC
Full article 2 comments
On news of retail sales the Real plunged to a ten-year low but on Thursday recovered some of the lost ground. However in six months the Real is down 19%  On news of retail sales the Real plunged to a ten-year low but on Thursday recovered some of the lost ground. However in six months the Real is down 19%

Retail sales in Brazil increased 2.2% in 2014 over the previous year, the smallest expansion in 11 years, the Brazilian Institute for Geography and Statistics, or IBGE, reported this week. The sector suffered its worst year since 2003 when sales tumbled 3.7%. In 2013, retail sales grew 4.3%.

 The announcement plunged the Brazilian currency to a ten year low, although at the end of trading in Sao Paulo on Thursday it had recovered slightly to 2.8238 Reais to the dollar, which is just a few cents short of the estimates for the whole of 2015. The Real has lost 19% of its value against the dollar in the last six months.

IBGE attributed most of the slowdown to the poor performance of food and beverage sales, the major segment, which had enjoyed strong growth in recent years as poverty and unemployment diminished.

Food sales increased 1.3% in 2014 compared with 1.9% the previous year, according to the IBGE.

The fall in food sales “may be explained by the deceleration in growth of workers' income, which rose 1.4% in 2014 as opposed to 2.4% in 2013,” the agency said.

“This sector's performance was also influenced by consumer prices for food, which, in the past 12 months, increased 7.1%, above the official inflation rate of 6.4%”, the statement said.

Five out of eight retail segments ended 2014 with increases over the previous year.

Sales of goods for personal and household use increased 7.9% last year; pharmaceutical and medical goods increased 9%, and fuels and lubricants increased 2.6%.

Furniture and appliance retailers saw their sales increase a mere 0.6% last year, down from 5% growth in 2013, a consequence of a rise in interest rates and the government's decision to withdraw tax incentives aimed at helping the sector weather the global economic crisis.

Sales of motor vehicles and parts fell 9.4% last year after a 1.4% increase in 2013, and IBGE blamed in part “the slowdown in lending, the end of tax incentives for this sector, the increase in interest rates and constrains in family budgets.”

Economists expect the slowing of retail sales will continue in 2015.

Categories: Economy, Brazil.
Tags: Brazil.

Top Comments

Disclaimer & comment rules
  • ChrisR

    NO, NEVER, Brasso says everything is great in the second worst sinkhole in SA!

    In fact it's so good Brazil are hoping to beat TDC to become the WORST sinkhole in the world.

    They could do with sinking a few sinkholes in Sao Paulo state if they want to avoid a major fiasco due to NO WATER for the population to live on.

    Feb 13th, 2015 - 05:06 pm 0
  • Jack Bauer

    The fall in food sales “may be explained by the deceleration in growth of workers' income, which rose 1.4% in 2014 as opposed to 2.4% in 2013,” the agency said.
    “This sector's performance was also influenced by consumer prices for food, which, in the past 12 months, increased 7.1%, above the official inflation rate of 6.4%”, the statement said.

    That food sales have diminished is a bad sign...when people go hungry as a result of government incompetence and malfeasance, they usually start to look for someone to blame....well, they wont have to look far...Dilma and the PT are sitting ducks.
    Funny thing this inflation index in Brazil...in 2014, prices in all segments, especially the ones controlled by government, increased well over those of 2013, yet the government came up with an inflation rate in 2014, smaller than that of 2013.... they are working 'miracles' again, just like they did in Petrobras.

    Feb 15th, 2015 - 09:52 pm 0
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