High indebtedness levels hold Brazilian retailers back

Americanas, Via, and Magazine Luiza — major physical and digital retailers — are decelerating, and the situation is unlikely to change before the first half of 2023

High indebtedness levels hold Brazilian retailers back
Lojas Americanas has lost 63 percent of market share in 2022. Photo: Leandro Marques/Shutterstock

As expected, the effects of the electorally motivated stimuli aimed at softening the impact of inflation are beginning to subside, as shown in the Q3 results of Brazilian retailers. 

Just like the banking sector, leaders in brick-and-mortar and digital retail are also decelerating in Brazil. Almost all major publicly listed retailers in the country posted net losses between July and September, pointing to inflation and a more cautious approach towards credit due to the high levels of household indebtedness and delinquency as the main causes.

Analysts say that high indebtedness and stubbornly-high food inflation have deprived consumers of disposable...

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