Higher cost and deflation on the edge textile retailers put in a delicate situation

After being hit by a deflation of 0.76% in the last two months, the textile retail sector saw 3.4% drop in total sales volume in the month of June. By the end of 2018, the retailers expect to recover the losses obtained with a sync between the temperatures of the South and Southeast regions and winter collections. "Until the middle of may we had a very warm winter, impacting sales planned for the period of the day, one of the most important dates in the calendar of the retailer," said the Executive Director of the Brazilian Textile retail Association (Abvtex), Edmund Lima. According to the spokesman, a series of events this year generated a cascading negative effect on the performance of trade in clothes, fabrics and shoes – especially the truckers ' strike in May. "The stoppage has made the flow of shoppers in stores to shrink, affecting sales also designed for other commemorative date, Valentine's day," said Lima. According to the Monthly Trade Survey (PMC), carried out by IBGE, for the month of June, year to date, the loss of textile industry reached 3.5%. As regards the nominal revenue of Brazilian retailers, according to the balance sheet, there was a retraction of 1.8% on the same basis of comparison. Specifically in the month of stoppage, the market turnover shrank around 3.3% of the previous month. "Retailers already trying to recover through early liquidation since Valentine's day [12 June]," he argued. Going forward in view of this scenario of a fall in sales, a trend of deflation and increased costs, Lima discards occurring a transfer of costs to the final price of the goods. "Currently, the retailer can't perform this transfer to the price of products to customers. Consumers, especially today, are very sensitive to any type of variation in this sense. " For him, it is expected that to occur greater compatibility between the temperatures and the stocks available. "The effort that we see now is related to the arrival of springtime and a climate more consistent with the launch of new collections to attract more consumers shopping," said the spokesman. The analysis of the Executive Director also spent by the macroeconomic scenario of the country. "This year, in particular, is challenging for the textile industry – considering the ambiguities in brazilian politics and economy still fought. We're fighting to keep the result obtained in 2017, "said Lima. Last year, this segment increased around 3.5%-with a financial drive of R $144 billion. According to him, for the second half of 2018, the prospect remains optimistic even after the mishaps of recent months. "Holidays as children's day, father's day, Christmas, Black Friday, placing the brand in a liquidation procedure," he said. Promotional appeal To the Director-General of Business Consulting Group Bandyopadhyay, Claudia Bittencourt, the fall in sales volume of the sector is also linked to lack of consumer confidence in the economy as a whole. "In this sense, with the prospect of improvement in the long run, the retailer will have to adjust your internal operation, reviewing costs associated to the operation of the stores and renegotiating with suppliers," he said. According to her, not to depend on totally commemorative dates, a possible alternative to the shopkeeper is to create promotional events "own". Furthermore, she states that, currently, it is necessary to complement the power of sale of units to virtual platforms, also considering a reduction in fixed costs of the business.