Political crisis should delay resumption of retail for at least another year

Sao Paulo-the uncertainties imposed by new political crisis, which has hit the Government Fear last week, should delay resumption of retail. The expectation in the industry now is to close the year with retraction. The turbulence will cause consumers stay afraid and businessmen entering standby compass, holding the contributions.
The evaluation is the President of the Brazilian Institute of executives in the retail and Consumer Market (Ibevar), Claudio Felisoni, and the Director General of the GS consulting & MD, Marcos Gouvea de Souza. "The recovery of the sector, which was already shy in the first months of the year, was greatly weakened. The scenario should delay the resumption for a period yet to be has dimension, "says Felisoni.
Until last week, the Institute had projected a growth of up to 1% to the branch in the year. After the events, triggered with the release of the audio conversation between the President Fear and Joesley Batista, JBS, the Executive says it is very likely that the advance does not occur.
The vision takes place on account of the impact of the political crisis will have on consumer confidence and business investment prospects. "People buy based on real income and the possibility to maintain the revenue stream. With this scenario, one employee worries if you can keep your job, and who are unemployed has less prospect of finding a job. All of this undermines consumption. "
The founder of GS & MD, Gouvea de Souza, also predicts a negative impact on the performance of the sector, which should vary depending on the developments of the political crisis. In the short term he predicts that retailers have an additional downturn, reversing the trend of curve signaled for an improvement in sales volume. "The situation necessarily postergará the resumption of industry," he says.
The consultancy has not yet estimated the size of the impact to the consolidated result of the year, but the Executive says there is a clear trend that the performance is worse than the projections made earlier. "If it is negative it will depend on the time for the solution to be drawn."
The National Confederation of Commerce (CNC) goes on the same line, and points out that the recovery of the sector, which was already slow, should take even more. "The main injury is the delay in reforms [of labour and welfare], and the interest cycle. The BC [Central Bank] was with a provision to reduce the Selic, but now I know more what it will be like, "says the principal economic advisor, Juliana Serapio. The CNC, however, has not yet revised the growth projection of 1.5% for retail in the year. Second Serapio, it''s too early to get an accurate measurement of the size of the impact.
Vision of the entrepreneur
From the point of view of entrepreneurship, business entities show concern with the scenario, mainly regarding the approval of the labor reforms and welfare, but they say it is too early to change the projections.
The President of the Institute for development of retail (IDV), Antonio Carlos Pipponzi, States that the moment is waiting. "We are apprehensive, but without a radical change in our politics and in our projects," he says. The entity has as associated companies such as the Sugar Loaf Group (GPA), Magazine Luiza, Carrefour, Renner, American stores, among others.
The President of the Brazilian Association of Tenants of Shopping (Alshop), Nabil Sahyoun, also claims that retailers linked to the entity are in and the great fear is about approval of labor reforms and welfare. "Our biggest concern right now is how all this can impact on the reforms. Because if they fail, the investments will stop. "
The President of IDV adds that the scenario which had been favourable and even a reborn optimism, paralyzed. "The heating of new projects and investments will have a momentary brake," he says. As well as the largest concern Alshop IDV is also the approval of the reforms.