Retail drops in June, but closes semester with growth

After two months of rises, the volume of Brazilian retail sales fell by 1.7 percent in June compared to the previous month, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). In comparison with the same period last year, however, the sector grew by 6.3 percent and ended the first semester of 2021 with a 6.7-percent increase. The results were also positive over the 12-month period, with a 5.9-percent increase.

Nevertheless, this month’s data was lower than expected by the market. Bloomberg, for example, had forecast an increase of 0.5 percent compared to May, rather than a drop. 

Moreover, analysts point out that the positive performance for the semester is mainly due to the severe fall in sales last year, when Covid-19 restrictions were more extensive. In the coming months, the combination of record-level unemployment and high inflation could reduce the purchasing power of Brazilian families and become a challenge for the sector’s recovery.