Trade-year 2013 was the worst of the Decade

Food inflation hurt retailers last year. But, for this year, the expectation is of less influence prices.
Trade sales grew by 0.7% in November 2013, a result higher than the October (0.3%), according to the Monthly Trade Survey (PMC), the Brazilian Institute of geography and statistics (IBGE). Still, the National Confederation of trade in goods, services and tourism (CNC) believes that the result of December won't be as good as expected. In the face of inflation considered high and the greatest difficulty of access to credit, the projection of growth of 4.5%, the worst in the last ten years, better only than the 2003 rate, year in which retailers recorded 3.7% retraction.
Fábio Bentes, Economist at CNC, assigns the frustrating performance in the industry last year to escalating inflation, the high of the basic interest rate, the Selic, and difficulties of access to credit. "The supermarket sector was the major highlight negative last year, driven especially by high food prices. In addition, the retail inflation, greater than the perceived wholesale, sacrificed the industry results "evaluated.
The activity of hypermarkets and supermarkets, as according to the IBGE, continue with below-average retail variations, reflecting food prices over the last 12 months, grew up in inflation. Sales in supermarkets went up 1.9% YTD and 2.3% in 12 months up to November. Already the whole trade grew 4.3 percent in the year and 4.4 percent in 12 months. The weaker performance of the supermarket segment occurs even in a period where employment is expanding and purchasing power, stable, "said Bentes.
Although the picture of the year for the segment be slowing because of the advance of the prices at the end of 2013, there was a reversal of the frame. Compared to the same month of the previous year, sales rose 5.7%, and the Group continues to exert the main impact on the total retail (40%). According to the IBGE Research Coordinator, Aleciana Guzman, also in this case, the result reflects inflation. "Prices are in lower level in foodstuffs and were featured for the month of reference," he said.
As for the extended retail — which includes the activities of vehicles and motorcycles, parts and construction materials — sales rose 1.3 percent in November compared with October and 5.7% compared to the same month of the previous year. In comparison with October, was recorded in nine of the ten surveyed activities, with an emphasis on vehicles and motorcycles, parts and pieces (2.5%).
According to the IBGE's technique, the good performance of the automotive industry in November took place by the news of the end of the program of elimination of the tax on industrialized products (IPI). "The numbers reflect a move of anticipation of purchase. But, for this year, it is still not possible to predict the behavior of this segment, "he said. With less influence of inflation, expectations for 2014 is a better year even as IPI return of automobiles.
"The return of the tax will be offset by inflation which should not be as bad as it was in the first half of last year. This will help the sector to grow at cruising speed over 2014 ", designed Bentes, betting at a high of 6.5% trading this year. The Economist of the Brazilian Institute of Economics of Fundação Getúlio Vargas (Ibre/FGV) André Barro provides that "the retail sector is expected to introduce a restrictive behavior this year, before the consecutive increases in the prime rate and the strength of inflation, which diminishes the appetite for consumption by households". Not even the completion of the World Cup this year will be enough to change this scenario and ensure very expressive gains by the sector.