After two years of contraction, Brazil largest retailers experienced a first quarter of growing sales and profitability, a trend that continued through April and May. According to the newsgroup Valor Econômico, the net revenue of nine large-sized retailers increased 14.8% from January to March when compared to the same period last year.

This group is composed by Pão de Açúcar (supermarket), Via Varejo (electronics), Raia Drogasil (drug retailer), Magazine Luiza (department store), Lojas Renner (fast fashion), Restoque (fashion), Profarma (drug wholesaler), Hering (apparel) and Multiplan (mall operator), whose combined revenue reached US$ 8,1 billion in the first quarter. Their net income rose from US$25 million to US$186 million, according to a Valor Data survey.

"The 2017 figures no longer reflect that catastrophe of 2016," says Fabio Bentes, an economist of the National Confederation of Commerce (CNC). He points out a reaction in segments such as apparel, construction materials, and electronics.

Reports from banking analysts indicate that the withdrawals from inactive accounts of the Workers’ Severance Fund (FGTS) have had a positive impact on retail sales.

The recovery reflects a restructuring process that several retailers initiated in 2016, aligned to a slight increase of consumers’ demand starting in March.

Considering a wider sample of the retail sector, the Institute for Retail Development (IDV) that congregates 60 retail chains throughout the country, shows that retraction has been slowing. In April, the sector grew 2.7% after a continuous retrieve in retraction rates: -4.1% in January, -2.3% in February and -1.6% in March. The entity estimates 3.8% growth for May and forecasts a 3.9% for June.

 

Source: Valor Econômico