Retail gross sales rise in October for the third month with anticipation of reductions
The Brazilian retail sector started the fourth quarter with an increase in sales for the third consecutive month in October and slightly above expectations thanks to the anticipation of Black Friday promotions, despite the scenario of economic slowdown.
Retail sales increased by 0.4% in October, showed data released this Thursday (8) by the IBGE (Brazilian Institute of Geography and Statistics), marking the highest reading for the month since 2020 (+0, 9%).
The result was the third in a row in blue, accumulating growth of 1.7% in the period. It was still slightly above the expectation in a Reuters poll of 0.3%, even in an environment of tight credit, high interest rates and high household debt.
“There was an increase in occupancy and Auxílio Brasil helped on the one hand, but on the other hand inflation, defaults and high interest rates slowed down (retail) growth. That’s why this face of stability at the margin, despite a positive rate”, explained Cristiano Santos, research manager.
This also left the sector 2.9% below the October 2020 record level and 3.4% above the pre-pandemic level of February 2020.
In comparison with the same month of the previous year, sales rose 2.7%, against expectations of 2.3%.
“Since 2020, Black Friday has been spreading, because companies began to anticipate promotions and discounts. We saw this now in October, especially in Furniture and appliances and Equipment and office supplies”, said Santos. Black Friday takes place at the end of November.
Even so, analysts do not foresee a gain of traction for retail ahead, which has been showing monthly results close to stability, considering the restrictive monetary policy of the Central Bank and the prospect of an economic slowdown, even with falling unemployment and moderate inflation.
“The restrictive monetary policy imposed by the Central Bank, which should help with the economic slowdown throughout 2023, will directly affect the performance of trade, which will have difficulties in establishing a sustainable growth path and should also lose traction over the next year”, warned Carla Argenta, chief economist at CM Capital.