In August, Brazil experienced a decline in retail sales, primarily driven by reduced consumer spending on clothing, furniture, and household appliances. According to the Brazilian Institute of Geography and Statistics (IBGE), sales decreased by 0.2% on a seasonally adjusted basis during the month, but still managed to show a 2.3% growth compared to the previous year.
Over the past few months, Brazil’s economic activity has displayed indications of a slowdown, as the initial recovery from the pandemic-related shutdown begins to lose momentum. Although government aid payments to low-income families have been instrumental in sustaining demand, factors such as a decrease in job creation and soaring borrowing rates have impacted purchasing power among households.
Specific Categories Affected
Within the retail sector, there were notable declines in the sales of clothing, shoes, fabrics (-0.4% in August, following a 2.9% drop in the previous month) and purchases of furniture and appliances (-2.2% in August, after a 1.1% decline in July).
We will continue to monitor and assess the evolving situation in Brazil’s retail market.