Brazil back to include more expensive products in the shopping cart

Washing machine liquid soap, moisturizing cream for hair, cookies and olive oil are some of the items you are returning to the shopping cart. And the market-leading brands are starting to replace the own brand products, cheaper. It's a move that reflects a first relief in the consumer's pocket, that can afford to expand their basic expenses. The advance comes pulled by the fall of inflation, by the decline in interest rates, which reduced the indebtedness of families, and by a gradual upturn in employment. There is still space to include on the list of purchases products such as yogurt, but the already consumption is seen as a boost to the growth of the economy this year, experts estimate, when the gross domestic product (GDP) should expand around 3%. This resumption in consumption, however, will be quite different from the boom of the pre-crisis years. The plenty common to who rose quickly in the consumer market, gives way to rationality, mostly because the middle class was the slice of the population most affected in the years of recession. "This increase in consumption is going to the improvement of basic expenses. Are trade marks, products that the person had left to consume or purchases were postponed. There is a greater awareness, "says Mariana Morais, consumer specialist consultancy Nielsen. In the House of Juliana Rodrigues da Silva Rio, the purchases have grown. "When the crisis started, we switch the brand of laundry detergent I used by other cheaper. Did the same with the shampoo. Now he's working to improve. I left a brand of SOAP cost R $12, but was weak, and buy a better, R $16, which fit in the budget, "says Juliana, who is administrative assistant. "We were also based on ground beef and chicken. But recently, we have been able to buy a steak ". R $124 billion more on consumption consumption must increase in R $124 billion in 2018, 5% increment on little more than R $2.5 trillions used in purchases annually, according to calculations of Santander. Enter into this account spending on nondurable consumer goods such as food and clothing, and durable, like appliances and vehicles, plus a long list of services. The additional value scheduled for this year, says the Bank, will come in two pieces. One is by increasing the wage bill, provided by the back of the job, with forecast of injection of R $87 billion. Other R $37 billion would be released at the lowest debt of households, who spend less on debt payments as a result to the fall in interest rates. Last year, the average income of the worker in the country grew at 2.4%, returning to the historical peak of the series, recorded in 2014, the first year of the crisis. In parallel, the unemployment rate retreated to 13.7% in the first quarter to 11.8% in the last three months of 2017. Official inflation ended the year at 2.95%. This data signal relief for consumers. "You have a greater stability in income and employment, and this generates a larger volume to retailers, a more sustainable growth, also reaching the services provided for families," says Rodolfo Morgado, an economist at Santander, remembering that the cycle of economic recovery depends on a set of factors. Shop more tired will come in line with advances in employment, mainly by the weight of class C in this movement. Nielsen drew three consumer groups in the country. At the top, is the consumers impacted by the crisis — almost two-thirds without children. Are evenly divided in three classes: AB, C and. At the other end is the group that is still in crisis and in which more than half (52%) are of class C, but the largest piece, in this case, there are children at home. In the middle of that sandwich is the group that entered and exited the recession grip, in which 54.4% of the class C, which is reactivating the consumption. But the improvement is still focused on basics. In 2017, the consumer came back to take home products that cut the previous two years, when he had to mop up the shopping list to make it fit in the budget. The liquid soap to wash clothes, for example, recorded a 10 percent increase in sales in the 12 months ending in October last year. In the same period, sales of laundry detergent fell in 5%. Trajectory similar to the ready juice, which advanced 15 percent, while soda, cheaper when comparing price per litre, retreated 8%. Beyond the relief in the budget, the consumer is a little push and the retail industry to fill your cart for less at the supermarket. "In the crisis, the supermarket industry has adopted the strategy of broadening the assortment of products and promotions, strengthening partnerships with industry to offer the best price and boost sales. With this, already see improvement in consumer food purchases fast. This pulls the industry, pulling, and opens a cycle ", says Fabio Qazi, President of the Association of Supermarkets in the State of Rio de Janeiro (Asserj). The River, however, he ponders, this gain happens more slowly, because of the crisis in the State. The supermarket sector closed with 1% indentation 2017 (already discounted inflation) compared to 2016. "The forecast was for a loss of 2%, but the actions taken with the suppliers and promotions have dampened the result". In recent years, the industry also came up with strategies to meet consumer's need to cut costs. Created larger packaging or refill, ensuring higher cost-benefit ratio, reduced portions, new product lines, seeking to meet practicality and affordability. "The crisis scenario in which consumers prioritize the economy at the time of the purchases, invest in a diverse portfolio in formats, sizes and benefits, says Giovanna Bressane Garcia, spokesman of the Omo brand, Unilever. On the purchase, what you see is a consumer more rational and reasonable. "The client is more measured, dosed. And the fall in the price of food was important to keep people buying. In Rio, we don't see a recovery in consumption in quantity, but in quality. The customer buys a larger variety, but takes a few items, "says Sergio Leite, commercial Director of the Rio de Janeiro World supermarket network. Promotions on the radar the reconquest of the consumer is in the crosshairs of the major manufacturers of consumer goods. Mark Bauer Lima, Manager of P&G intelligence, which includes brands such as Ariel, Oral-B and Pampers, calculates that it will be possible to increase in R $27 billion spending of Brazilians with hygiene items and beauty. Only in the State of Rio, would be R $1.5 billion. As an example of opportunity, he cites the segment of hair treatment. Without having gone totally from the crisis, the consumer wants to take care of, but still cannot get to the salon, so seeking alternative treatment to do at home. Not for nothing, the atacarejo should continue as an important sales channel, says Christine Parker, commercial Director of Kantar Worldpanel: consumer. Is that the consumer is aware of that allows you to get more for less. Larger packages or promotions like "take three, pay for two" also motivates the purchases. "The atacarejo will follow as the preferred channel for supply purchases, but the consumer is beginning to look at the neighborhood grocery stores for purchases of re-composition", she explained.