By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Retailers in Brazil could lose over R$10.5 billion this year due to national holidays, show the estimates from the São Paulo Commerce Federation (FecomercioSP). According to the entity, this volume is two percent higher than that forecast in 2016 due to the fact that in 2017 there will be an extra holiday during the workweek.
“The clothing, fabrics and footwear sector is expected to lose approximately R$1.1 billion with the holidays in 2017, 23 percent more than in 2016,” read the press release. The supermarket segment also is expected to register losses close to R$3 billion, while pharmacies should register a loss of R$1.6 billion, all higher than last year.
According to the entity, the only segment to lose less revenue this year will be other activities, which include fuel sales, jewelry and watches and stationary, among other items.
In addition to the holidays that in 2016 fell on the weekend and that this year will be on a workday, there are also other factors to take into consideration says the entity. Some of this year’s national holidays will fall on a Tuesday or Thursday, leading workers to take off Monday or Friday and ‘extend’ the holidays.
State and municipal holidays could also hinder retail revenues this year. In January for example, Rio de Janeiro celebrates San Sebastian Day, patron saint of Rio de Janeiro on the 20th, while São Paulo city celebrates its foundation on the 25th, both municipal holidays.
For establishments wishing to open their doors on holidays in an attempt to reduce these losses, the entity warns of the additional labor costs for the company which may make this option unfeasible: one hundred percent extra for holiday hours and 37 percent extra in taxes.
According to Fecomercio, with the increases of costs stores end up choosing not to open during the holidays.