Retail horizon not so pretty
Q1 earnings season for Brazil’s top retailers is still underway. However, what has been released so far suggests that retailers catering to high-income customers are performing better, while food retailers are demonstrating operational resilience.
Why it matters. Family consumption is a key driver of the Brazilian economy, and retail is one of its central thermometers. According to the latest edition of the Stone retail economic activity index, retail sales fell 7.7 percent in April compared to the same period last year.
- The study by tech company and acquirer Stone, in partnership with Propague, uses data from Brazil’s Federal Revenue Service and companies’ customer bases to measure the level of activity in the sector every month.
- It is a significant sample, as Stone currently accounts for 11.6 percent of all card transactions in the country, according to Goldman Sachs.
Retail: Widespread decline. Six of the seven segments analyzed in the study showed a retraction in sales volume compared to April 2022. The only exception was pharmaceuticals, sales of which grew by 3 percent.
- Sales in the food segment — which includes supermarkets, beverages, and tobacco — fell by 5.7 percent over the same period.
- Books, stationery items, construction materials, furniture and appliances, textiles, clothing, and footwear posted further declines.
Bad timing. April 2023 had more public holidays than the same month last year. More holidays tend to...
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