Panel SA: Varejo cries and celebrates with World Cup, Black Friday and Christmas together this year, says Casas Bahia

World Cup, Black Friday and Christmas are three dates that are usually celebrated with high retail sales. This year, as the Worlds will be in November and December, they will coincide, but that’s not necessarily good news.

Roberto Fulcherberguer, president of Via, owner of the Casas Bahia and Ponto networks, forecasts a fourth quarter of accelerated sales, but the Cup, which traditionally drives demand for televisions, will overtake.

“This year something happens that, sometimes we celebrate, sometimes we cry, because three seasonalities were concentrated. For us, the ideal would be the Cup in the middle of the year, because it would leave these events a little more separated”, he says.

Faced with inflationary pressure, Fulcherberguer says the company has been trying to avoid passing it on to the consumer.

The fuel weighs on freight, but Via has used the stores to pick up the delivery instead of the warehouse, in an attempt to make the process cheaper. Measures such as cutting the IPI (Tax on Industrialized Products), while helping to control the transfer, have a reduced impact and are difficult to measure in the current scenario.

The reflection of the fall in the shares of retail companies is a movement that he sees as fleeting. “Due to the increase in Selic, inflation, retail no longer has that priority that it had in the past on the stock exchange. And commodity becomes a priority. We think this is a cycle”, he says.

How concerned are you with inflation?For us, I would say that it caught at the beginning of the pandemic with the rise in the dollar. As most of our items are pegged to the dollar, the big increase has already taken place. This in terms of product price. What is impacting are the general retail expenses of our business.

We’ve been putting several medicines to try to get through this without the need to put more price on the consumer.

And the fuel?Quite a lot, because we deliver most of what we sell. We’ve been able to get through this moment without major transfers, thanks to everything we’ve invested in the last two years. Today, for example, half of everything we sell online is delivered from the last mile. We use our stores to make the departure of the delivery. It’s a much cheaper delivery than when it leaves the warehouse.

This and several other measures we have taken, modernization, using algorithms in distribution, have helped us to go through this suffering less. But, without a doubt, what is happening in diesel has an impact on the cost of freight.

With the reduction of the IPI, was the industry able to pass it on? Does it reach the consumer?Yes, it’s already been done. But it’s a small reduction this time. It’s already been passed on from the beginning, but there are no big sales evolutions here because of this reduction that happened in the IPI.

Did it not have the desired effect?In fact, given that sales are not expanding at an accelerated rate, it is difficult to understand how much of the sales perhaps stopped falling because of the measure, or how much they did not expand.

We didn’t see a big explosion like there was back there, when there was a reduction in the IPI. What you had now was pretty much controlled. The reduction is small. It is not that significant in the price of the product.

This year, the World Cup is an important seasonality. Are you excited?In fact, this year, something happens that sometimes we celebrate, sometimes we cry. Because three seasonalities were concentrated in the same season: World Cup, Black Friday and Christmas. For us, the ideal would be the Cup in the middle of the year, because it would keep these events a little more separate. The last quarter will be accelerated in sales.

We are well prepared. We’ve been doing this preparation since last year. Cup is a very important seasonality for our segment.

And the stock?We already have the purchase made and the arrival of the stock a little later. But negotiations are already underway.

Does election have any effect on sales?It doesn’t have a big impact. In fact, governments end up spending a little more at this point and more money ends up circulating in the economy. The reflection of this is a little more selling, but nothing that accelerates too much.

Electoral scenario always brings uncertainty, but does having an apparently crystallized perspective this year facilitate or hinder predictions?The Brazilian businessman learned to go through these moments without counting on them. You can’t plan for next year waiting to see what will happen in the election. So, it’s given. Planning is already done. Via continues to invest, regardless of who will run the country.

The business does not depend on it. In 2021, we opened 101 stores. This year it should be around 80. Next year’s plan is getting ready.

And the fall in stocks in the sector? What are the prospects?In fact, what we see is this segment with a big drop. If we take Via and the comparable pairs, the drops are more or less similar. Due to the increase in the Selic rate, in terms of inflation, retail no longer has that priority it had in the past on the Stock Exchange. And commodity becomes a priority.

We think this is a cycle. Things are starting to get clearer, which retailers are actually able to get through this and win this game. The trend is for us to regain interest in retail in stocks in the medium term.

After the euphoria that the pandemic caused in digital sales, how was it?At the beginning of the pandemic, I had no other alternative. When the stores closed, the only way out was digital sales. We humanize digital selling through the online seller. He was at home office and began to serve customers virtually. That followed. We earn more or less R$ 2 billion per quarter via online sellers. He is physically in the store, but serving the customer digitally.

And digital selling began to balance. With the stores reopened and everything normalized, the consumer returned to the physical store. Brazilians like relationships. Digital sales continue to rise, our store has recovered revenue and the digital salesperson continues to grow. We think the future of this business is hybrid.

There has been a recent protest movement with industry and retail against the digital camelódromo, which is an important topic for the formalized market. Did that move help?I’m always asked: “Are you worried about international players?”. I say that we are not concerned with competition. We even like it because we end up evolving. We have great assets on hand, omnichannel logistics, our credit platform with more than 50 years of experience and which has now gone digital as well. We see competitors that are publicly traded reporting 30% delinquency. Our loss is 3.60%, 3.70%, a barrier that never exceeded 5%. These are important differences.

It’s extremely healthy when everyone competes on the same basis. Now, competing with someone who doesn’t pay tax gets more complex. I think it’s great that the industry is together in this demand. It’s everyone’s claim. What you need is fair competition, everyone pays on the same tax basis. Whoever delights the consumer the most wins.

How is the concern with default?This scenario has been in this complexity for some quarters. What we are seeing here at Via is that there is no increase in delinquency occurring. It’s under control. We have been doing this for over 50 years, and now all this experience is in digital credit engines. There is no longer any human intervention in the granting of credit, it is 100% based on algorithm and robot. For us, we are not seeing an increase in delinquency.

When the pandemic started, and this was a risk, we grew by almost R$ 1 billion in the financing portfolio. This year, we started with R$5.2 billion in the portfolio, and we should end the year with R$6 billion. We are growing in credit. With all the concerns, which make sense, it’s already part of the company’s DNA.

How was the case with the increase in labor claims at Via?It’s a matter of the past. Via started in 2013 with around 80 thousand employees. When I took over, in June 2019, I had 45,000. The company had its own fleet of trucks, with drivers, a team of assemblers, the installment plan was 100% humanized. This all came out over the course of 2013 until 2018.

This labor claim that Via published in a material fact is based on this past. This is balanced. The expense that we project for this year will happen at the levels projected. And it was the company’s biggest expense year. From next year, it starts to fall. And already in 2024 it enters the normality regime, according to what happens in the retail average.

Via

Owner of the Casas Bahia, Ponto, Bartira and Extra.com chains, Via also brings together brands such as the digital bank banQi, fintech Rede Celer and logistics businesses. In the first quarter, it reported operating net income of R$86 million, down 52% from a year earlier