Itaú BBA - Retail: A Cool-Down in Sight

Sector Insights

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Retail: A Cool-Down in Sight

March 11, 2015

he retail sector has grown faster in Brazil than in other nations in recent years.

• The retail sector has grown faster in Brazil than in other nations in recent years. The sector’s share of GDP expanded during a period when consumer spending was driving economic growth.

• However, the retail sector is showing a slowing trend at the margin and the fundamentals indicate that this dynamic will continue throughout this year. Demand will likely cool down as the real wage bill decelerates, while low confidence levels will lead consumers to postpone purchases. 

• The slowdown in sales has already affected the supply side, and labor market conditions in the sector have deteriorated, as has business confidence. 

• Manufacturers have been making adjustments in order to curb inventories, which remain high in several segments. External competition and higher taxes will contribute to lower retail sales in the short term.


 

Please open the attached pdf to read the full report.



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