Brazilian trade sales were rising before the impact of the coronavirus



Brazilian trade sales grew 1.2% in February compared to January, its largest expansion for that month in four years, before being impacted by the crisis caused by the spread of the coronavirus and which forced several cities to close the shops in March.

In addition to having increased compared to January, the sales of Brazilian retailers grew by 4.7% in February, in volume, compared to the same month of 2019, the state-owned Brazilian Institute of Geography and Statistics reported on Tuesday ( IBGE).

The good performance of trade in February made the sector's sales accumulate growth of 3.0% in the first two months of 2020 and 1.9% in the last twelve months, from March 2019 to February 2020.

But what seemed to be a year of strong recovery for trade ended up impacted by COVID-19, which forced regional and municipal governments of Brazil to impose different measures of social isolation to slow the spread of the virus, among which the closure of non-essential businesses.

With restrictions imposed in March, in most of Brazil's 27 states, only essential shops, such as supermarkets, bakeries, butchers and pharmacies, normally operate.

According to provisional data released on Monday by the National Confederation of Commerce (CNC, employers), sales fell 35% in stores that open onto the streets in March compared to the same month last year and 50% in the malls.

The same entity released a projection according to which sales in Brazil during Easter week, one of the most important seasons for the sector in the country and which began on Sunday, will drop a historic 31.6% this year compared to those of 2019 due to restrictions imposed by the coronavirus.

"The effects of the COVID-19 pandemic dramatically restricted the flow of consumers to stores," said CNC President José Roberto Tadros.

The pandemic impacted a sector that had been growing and that registered an increase in sales in February in five of its eight subsectors.

The subsector with the most boost was supermarkets, food and beverages, whose sales grew 1.5% in volume in February compared to January.

Sales in the furniture and household appliances subsectors also increased (1.6%); pharmaceutical, medical and cosmetic articles (0.6%); textiles, clothing and footwear (1.6%) and other articles for personal and domestic use (1.5%).

The subsectors in which sales fell were books, newspapers and magazines (-3.8%), office and computer equipment and supplies (-1.1%), and fuels and lubricants (-0.6%).

In addition to the impact of the measures against the coronavirus, merchants also foresee a sharp drop in sales in the coming months due to the depreciation accumulated by the real against the dollar so far this year, of almost 30%, since it makes products more expensive. imported, and by the fall in consumer confidence and risk aversion.

In addition to trade, the measures against COVID-19 have affected almost all economic activities and already suggest a strong retraction in the Brazilian economy this year.

The possibility that social limitation measures may have to be prolonged longer than expected led market analysts to double their projection for the contraction of the Brazilian economy in 2020 from 0.48% calculated last week to 1, 18% expected in a poll released this Monday.

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