Retail sales decline in December, but end 2021 up 1.4%

Brazilian retail sales fell less than expected in December and accumulated growth of 1.4% in 2021. It was the fifth consecutive year of growth in retail business volume, announced this Wednesday (9) the IBGE (Brazilian Institute of Geography and Statistics).

Despite the positive result, the sector showed signs of losing steam over the months. The situation leaves analysts on alert, even more so in a context of persistent inflation, higher interest rates and fragile income.

Retail sales fell by 0.1% in December, compared to November, according to the IBGE. The contraction was smaller than expected by analysts in a Reuters poll. The estimate was for a fall of 0.5%.

In comparison with the same month of 2020, sales had a retraction of 2.9% in December. The expectation was for a loss of 3.3%.

The sector had been registering growth in the first part of 2021 (6.7%), but had a sequence of declines in the second half, which ended with a 3% decline.

In December, trade was 2.3% below the level of February 2020, considered pre-pandemic level by the IBGE. Sales are still 5.7% below the record set in October 2020.

“The main component of recent months was inflation. Inflation has reduced the gain in volume that retail can have”, said Cristiano Santos, manager of the IBGE survey.

He also recalled that business is hampered by higher interest rates and lower income from work in the country.

In a note, the CNC (National Confederation of Trade in Goods, Services and Tourism) said that “high inflation prevented sales acceleration in 2021”.

“Retail suffered less from the pandemic and more from the deterioration of consumption conditions”, pointed out the entity, which maintains an expectation of a 0.9% increase for sales in 2022.

Activities

In December, four of the eight activities surveyed showed an increase compared to November: pharmaceutical, medical, orthopedic, perfumery and cosmetic articles (3.2%), books, newspapers, magazines and stationery (2.4%), furniture and household appliances ( 0.4%) and fabrics, apparel and footwear (0.4%).

On the other hand, three branches fell between November and December. They were the following: other articles for personal and domestic use (-5.7%), equipment and supplies for office, IT and communication (-2.0%) and hypermarkets, supermarkets, food products, beverages and tobacco (-0, 4%). The fuel and lubricants sector was stagnant (0%) in the period.

In the accumulated of 2021, four branches were in the blue. The increases were registered by fabrics, apparel and footwear (13.8%), other articles for personal and domestic use (12.7%), pharmaceutical, medical, orthopedic, perfumery and cosmetics (9.8%) and fuel and lubricants (0.3%).

On the other hand, four other activities accumulated losses in this comparison. The decreases were registered by books, newspapers, magazines and stationery (-16.9%), furniture and household appliances (-7.0%), hypermarkets, supermarkets, food products, beverages and tobacco (-2.6%) and equipment and office, IT and communication material (-2%).

The IBGE also reported that expanded retail sales, which include vehicles, motorcycles, parts and pieces and construction material, increased 0.3% in December, compared to November. Year-to-date, the increase in this segment was 4.5%.

with Reuters