Brazilian retail sales dropped 1.3 percent between August and September, according to data reported by the Brazilian Institute of Geography and Statistics (IBGE) this morning. It was the second straight negative month for the sector and the worst September performance since 2000. Since the beginning of the year, the retail sector has grown 3.8 percent. But that recovery has lost steam, with September 2021 numbers down 5.5 percent from the same period last year.
The results were worse than markets expected. Data company Refinitiv, for instance, foresaw a drop of “just” 0.6 percent in September.
According to IBGE’s Cristiano Santos, inflation was the main culprit for the decline. “This is clear when we compare the 1.3-percent drop in volume and the -0.2-percent variation in revenue, which is stable. The component that pushes volume down is inflation. Consumer goods have become more expensive,” he said.
“For fuels and lubricants, for example, revenue was -0.1 percent, totally stable, and volume dropped 2.6 percent. The same goes for supermarkets, which went from 0.1 percent of revenue to -1.5 percent. However, the same factor does not apply to fabrics, apparel, and footwear, which fell in both volume and revenue, signaling deflation generated by the reduction in demand.”
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