Falling retail in Brazil, a worrying month of May for retailers, what does this show about Brazilians' finances?
Even with Mother's Day, the month of May was not a good month for retail, sales decreased. This reflects the high indebtedness of families.
Furthermore, tight credit conditions reflect a decrease in retail sales, which is the natural consequence.
By committing your income to basic issues such as food, housing, energy and water, purchases decrease.
However, the expectation of improvement is evident, and you will understand the reason for hope for retailers.
Falling retail in Brazil, understand everything that involves the drop in retail and retailers' expectations.
What was the drop in May?
Firstly, the IBGE (Brazilian Institute of Geography and Statistics) reported a drop of 1% in sales.
At first, this attracts attention as the month of May is usually a good month for retailers. Since Mother's Day, sales tend to increase.
However, this time, not even Mother's Day saved sales in May. Reflecting the indebtedness and tightness of household credit.
A study carried out by Banco Santander demonstrated a decrease in family incomes of up to 4%. Thus, purchasing power decreased, directly affecting retailers.
According to analyst Gabriel Couto, the weak performance of the construction materials sector contributed to the drop in retail in the period.
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What was most impressive is that for every 10 retail sectors analyzed, 5 had a drop in sales. Including sectors such as clothing (-3.3%) and supermarkets (-3.2%).
Branches that previously did not see a drop in income, especially in a strong month like Mother's Day.
It wasn't worse due to the pharmaceutical sector which had an increase of (+2.3%). The high commitment to basic household bills has reduced families' purchasing power.
What is the hope for improvement in retail?
Unroll Brazil
A federal government program aims to eliminate debts for Brazilian families. On Monday, July 17th, the first stage will begin.
Initially, for families with debt of up to R$ 100. Reaching up to 1.5 million people. Furthermore, with the program more than 30 million people will be able to renegotiate their bank debts.
However, it is necessary to understand that, in this first stage, only people who owe up to R$ 5 thousand will be able to participate.
The program should benefit up to 70 million Brazilians by the end. Another group benefiting from the program are people with incomes of up to R$ 20 thousand, and bank debts.
What impact will this have on retail? The hope of retailers is that by negotiating their debts and rebuilding their credit, retail results will improve.
Retail is falling in Brazil, but it has everything to react with this program from federal government. Therefore, anyone who wishes to be part of the program must access the federal government website.
This way, you will resolve all your doubts and recover your credit.
