Brazil retail sales surprisingly fall in November, first fall in seven months
- Retail activity had rebounded to record levels in October from the depths of the COVID-19 crisis earlier last year.
- It is common for consumers, when there is a drop in income or purchasing power, to buy fewer non-essential products and to choose cheaper brands.
BRASILIA: Brazilian retail sales surprisingly fell in November, official figures showed on Friday, the first decline in seven months mainly driven by a sizeable fall in sales of food products.
Retail activity had rebounded to record levels in October from the depths of the COVID-19 crisis earlier last year, which Economy Ministry officials said reflected the wider economic rebound. But that momentum is clearly slowing.
October's increase was revised down slightly and November's decline, while small, suggests the recent spike in inflation is starting to bite and that lower income consumers are tightening their belts ahead of the end of emergency government aid.
"It is common for consumers, when there is a drop in income or purchasing power, to buy fewer non-essential products and to choose cheaper brands," said IBGE survey manager Cristiano Santos.
Retail sales volumes excluding cars and building materials slipped 0.1% in November from October, statistics agency IBGE said, weaker than the 0.4% rise forecast in a Reuters poll of economists.
Five of the eight sectors covered by IBGE showed increased sales. But sales of supermarket, food and drink and tobacco products, which have a 45% weighting in the overall index, fell 2.2% on the month.
On an annual basis, retail sales grew 3.4% in November, compared to expectations for a 4.9% increase in the Reuters poll.
Year-to-date sales were up 1.2%, and 1.3% higher in the 12 months to November, IBGE said. Having hit a record high in October since the IBGE series began in 2000, sales volumes were still up 7.3% on pre-pandemic levels from February last year.
On a wider basis, including cars and building materials, retail sales rose 0.6% in November from the previous month and 4.1% from November 2019, IBGE said.
Wider retail sales are back above pre-pandemic levels from February, but in the first 11 months of last year were still down 1.9%. As the IBGE chart below shows, wider retail sales volumes are still 1% below their all-time peak in August 2012.
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