Brazilians are back to consuming more expensive products in supermarkets

In a scenario of government aid on the eve of the elections, a truce from inflation and an incipient resumption of income, Brazilians are beginning to migrate part of their consumption to more expensive products in supermarkets.

The conclusion is from Abras (Brazilian Association of Supermarkets), based on data released this Thursday (13). The migration, says the entity, was observed in the composition of a basket of goods that includes everything from food to cleaning and hygiene items.

In August 2021, 55.5% of this basket consisted of products sold in the low-price category. In August 2022, the percentage dropped to 52.7%.

Meanwhile, items in the average price category increased from 28.2% to 30.2% of the surveyed consumer basket. The share of premium goods, in turn, with higher values, increased from 16.3% to 17.1% in the same period.

In Abras’ view, Brazilians are returning to looking for brands they used to consume before the price spike and the loss of income in the pandemic.

The entity attributes the recent changes to factors such as the truce of inflation and the benefits boosted by the federal government on the eve of the elections.

“Consumers are returning to buy those products they used to consume,” said Marcio Milan, vice president of Abras.

Pressured by high inflation in an election year, President Jair Bolsonaro (PL) bet on cutting taxes to curb prices, as well as raising Auxílio Brasil from R$400 to R$600.

In September, the IPCA (Extended National Consumer Price Index) fell for the third consecutive month, according to the IBGE (Brazilian Institute of Geography and Statistics).

The official inflation index dropped 0.29% last month, driven once again by gasoline, which had tax relief. In June, Bolsonaro sanctioned the law that determined a ceiling for charging ICMS (state tax) on fuel.

The IPCA food and beverage group also fell in September. The drop was 0.51%, the first since November 2021 (-0.04%).

Analysts consulted by Sheet do not expect more deflation for food until the end of the year. The expectation is for more moderate advances than those recorded at the beginning of 2022. In 12 months, the food and beverage group accumulated inflation of 11.71% until September.

Food shortages especially affect the poorest population, who spend a larger share of the family budget on the purchase of basic products.