Coronavirus Epidemic Topples Weekend Sales in Brazil
RIO DE JANEIRO, BRAZIL – The Brazilian retail trade has already felt the slump in sales due to the measures followed by the population to prevent the spread of the coronavirus epidemic, which include the reduced circulation of people in public places, such as shopping malls, for instance.
Between Saturday and Sunday, cash and credit sales in stores, excluding supermarkets, dropped two digits compared to the same period last year and also in comparison to the preceding weekend.
A survey carried out by the Gastão Vidigal Economics Institute of the São Paulo Commercial Association (ACSP), based on the national sample provided by Boa Vista Services, points to a 16.7 percent drop in cash and credit sales in comparison to the same weekend last year. The drop was 16.3 percent over the preceding weekend.
“This is a sharp downturn. From now on, the effects on retail will depend on the measures that will be taken,” says ACSP’s chief economist Marcel Solimeo.
He points out that before the weekend and the adoption of emergency prevention measures, retail sales this month were growing 5.3 percent in the city of São Paulo alone compared to March last year. Considering the same number of days, performance was stable in this comparative basis.
“Today, the environment is highly uncertain and, therefore, it is impossible to reassess the projections for retail performance this year,” says Solimeo. The initial projection was for the retail trade to close this year with a growth of between two and three percent over 2019.
However, Solimeo believes that after the peak of the epidemic, this loss in sales will be reversed and may even be offset, because consumers should resume purchases that were put off due to the public health crisis. On the other hand, service companies, such as bars and restaurants, should be more heavily affected than stores, because the lost demand will not be offset later on.
According to the economist, a matter of concern is that heavily indebted stores have working capital difficulties. “In this case, the drop in demand could be fatal.”
Source: Estadão
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