Mother’s Day should have lower sales and search for cheaper products

In a scenario of strong inflation, weak income and high interest rates, Mother’s Day sales in Brazil are expected to decline 1.8% in 2022 compared to 2021, projects the CNC (National Confederation of Commerce in Goods, Services and Tourism).

By the entity’s calculations, the retail trade tends to move R$ 14.42 billion as a result of the date, which will be celebrated on May 8.

The event is the second major event on the trade calendar. It’s just behind Christmas.

Last year, sales totaled BRL 14.68 billion, the highest amount since 2015 (BRL 15.1 billion), according to estimates updated by CNC.

The numbers already take into account inflation, which has skyrocketed in recent months, making it difficult to buy goods and services.

If the entity’s projection is confirmed, sales in 2022 will be the lowest since Mother’s Day 2020, the initial year of restrictions caused by the arrival of the pandemic in the country.

At the time, the figure had plummeted to R$8.82 billion, the lowest level in a historical series with data since 2005.

“The health crisis begins to leave the scene, but the deterioration of consumption conditions appears this year”, says Fabio Bentes, economist at CNC.

“The forecast is for a warm Mother’s Day,” he adds.

Brazilian should look for items that cost less

The clothing, footwear and accessories sector usually accounts for the largest share of sales on that date. This year, the scenario should be no different.

The forecast is for revenue of R$ 6.69 billion in this activity, an increase of 1.4% compared to last year, according to CNC.

The segments specialized in home appliances and electronics (R$ 2.33 billion) and furniture and appliances (R$ 2.29 billion) are also expected to account for significant portions of sales.

However, both tend to suffer significant drops compared to last year, 9.3% and 9.5%, respectively.

According to Bentes, the explanation for the differences between the activities is related, in part, to the worsening of consumption conditions in the country.

With the tightness in the pocket, Brazilians tend to prioritize the purchase of gifts that usually cost less.

Part of the clothing, accessories and cosmetics items are examples of this list. In other words, small memories should be sought after.

The deterioration of consumption conditions makes it difficult, above all, to purchase more expensive items that are more associated with purchases in installments. This is the case of home appliances and electronic devices.

“The clothing sector should concentrate a good part of the billing of the date because it may have a lower ticket”, points out Bentes.

The advance of vaccination against Covid-19 and the lifting of restrictions have generated a positive expectation for retail in recent months, says Luis Augusto Ildefonso, institutional director of Alshop (Brazilian Association of Shopping Shopkeepers).

However, the leader recognizes that the Mother’s Day scenario is one of caution due to factors such as the soaring inflation and the indebtedness of families.

“The consumer will celebrate, but probably the average ticket will be lower or very similar to last year”, he says.

“Families are in debt. So, it is very likely that mothers receive a small souvenir as a gift, and not a large electronic device or a white line appliance”, says Aldo Macri, vice-president of Sindilojas-SP, which represents in around 30 thousand shopkeepers in the capital of São Paulo.

In the director’s view, even with the worsening of consumption conditions, the improvement of the sanitary situation and the lifting of restrictions on economic activities may even generate a Mother’s Day a little better than last year, but still far from a situation “Wonderful”.

“With the search for a lower price, segments such as clothing will be sought after”, he says.

Price hike spreads across products

In March, the country’s official inflation, measured by the IPCA (Broad Consumer Price Index), reached 11.30% in the 12-month period.

It is the highest level since October 2003 (13.98%), according to the IBGE (Brazilian Institute of Geography and Statistics).

In the same period, products and services that are usually associated with Mother’s Day gifts also became more expensive.

Appliances and equipment, for example, accumulated inflation of 20.43% until March. Jewelry (19.86%), furniture (19.80%), tourist packages (19.63%), lodging (15.50%) and women’s clothing (14.24%) also rose.

Sneakers (13.62%), women’s shoes (13.43%) and wristwatches (12.47%) also did not escape the famine.

To try to contain inflation, which has become more widespread throughout the economy in recent months, the BC (Central Bank) has been increasing the basic interest rate.

In March, the Selic reached 11.75%, the highest level in almost five years. The rising base rate increases the cost of credit lines offered to consumers and companies in the country.

In the midst of this context, the proportion of Brazilians in debt hit a record, according to a CNC survey.

In March, the percentage of families that reported debts due reached 77.5%. It is the largest ever recorded in the 12 years of the survey. A year earlier, the share was 67.3%.