Brazil’s retail sales falls by 5.5% y/y in September

The volume of retail sales in Brazil fell by 5.5% y/y in September, following a decline of 4.1% y/y in the previous month. The volume of sales declined in seven out of eight segments analysed. Notably, sales of furniture and appliances plunged by 22.6% y/y in the ninth month of the year, followed by computers, communication equipment and office supplies (-14.8% y/y), and other personal and home goods (-6.9% y/y). Otherwise, sales of pharmaceuticals, cosmetics, and perfumery increased by 4.3% y/y.

The extended retail sales index – which also includes construction materials and vehicles – fell by 4.2% y/y in September, in volume terms, as sales of construction material plummeted by 10.3% y/y. Nevertheless, sales of vehicles, motorcycles, and components improved on an annual basis, rising by 2.9% y/y.

The volume of sales declined in seven out of eight segments analysed

According to the Brazilian Institute of Geography and Statistics (IBGE), which calculates the index, high inflation is the main reason for the plunge in retail sales volume. Brazil’s official inflation index, the IPCA, soared by 10.67% y/y in October, following an increase of 10.25% y/y in September, supported by rising prices of fuels and electricity. In addition, the labour market continues to suffer the effects of the COVID-19 pandemic, as the unemployment rate exceeded 13% in August.

On the regional breakdown, states in the North and Northeast regions recorded the highest decreases in retail sales in September, such as Maranhao (-12.3% y/y), Sergipe (-11.9% y/y), Rondonia (-11.8% y/y), and Tocantins (-11.7% y/y). The state of Espirito Santo – in the Southeast region – was the only one to record an increase in retail sales volume, by 4.4% y/y. In the state of Mato Grosso do Sul – in the Central-West region – retail sales volume was almost stable, edging down by 0.1% y/y. Read more.

Brazil’s retail sales growth is updated monthly, available from January 2001 to September 2021. The data reached an all-time high of 23.7% y/y in April 2021 and a record low of -17.1% y/y in April 2020.