Crisis still dictates consumer habits

Inflation cooled, but not enough to stimulate consumers to expand their purchases in super and hypermarkets. Still depressed by fear of losing their jobs, and with flat income, keep habits acquired when the recession seemed more acute and inflation higher. The Brazilian is still seeking promotions, packages and shows preference for atacarejo.
The concern about jobs is unfounded. According to the Brazilian Institute of geography and statistics (IBGE), the unemployment rate rose in every month of this year, reaching 11.6% in July, which equals 11,800,000 unemployed. The 90,500,000 that kept employees saw their performance deteriorate on account of inflation.
As a result, the retraction in consumption reached retailers, causing a fall in the volume of sales in all categories evaluated by IBGE. In hypermarkets and supermarkets, sales of food, beverages and tobacco record fall of 2.9% this year, until July. In 12 months, enough retraction reaches 3.1%.
"The mood of consumers changes as there is improvement in perspective on the economy of 2017, with lower inflation, lowering the prime rate [Selic] and fall in the level of unemployment. But, actually, there was no significant change in the macroeconomic indicators, "says Maximilian Bavaresco, Managing Director of Sonne consulting.
The analyst notes that consumers have changed their behavior because of the recession and should not go back to old behaviors before 2017. "In General, consumers are still very much based on offers and promotions, because of the high unemployment and the fall in household income," says Bavaresco. For him, the replacement of shopping in supermarkets and hypermarkets by atacarejo is another change in the profile of consumption that remains.
"Consumers will less at stores, but major shopping, which last longer, since it represents the economy," says Alejandro Arruiz, Director of commercial strategy of supermarket chain Cencosud Brazil. The Chilean group owns flags as GBarbosa, Mercantil Rao and Prezunic. "Recently we realized even more remarkable presence of family groups uniting to shop shared, an alternative to bring more products for less."
In the categories with the largest packaging or economic sales grow 25% this year, compared to 2015, says Arruiz. Manufacturers of detergents for clothes, cleaners, toilet paper, diapers, powdered milk, chocolate, soft drinks and juices are among the ones that exploit this format, he says.
Tiago Oliveira, Manager of solutions for retailers of Kantar Worldpanel: consumer, says that the increased consumption of brands with lower the price positioning of leading brands. He cites as examples the increased sales of brands such as Harvest, in meat; Itambé, in milk; and bright, in detergent for clothes.
Own brands, with prices on average 40% cheaper, continue as bet of supermarkets. Oliveira observes that neighborhood stores sales grow more than hypermarkets. "The smaller networks work with more regional brands make less price adjustments in stores, because they work with the stock any longer. With this, attract more consumers, "said Oliveira. Regional retailers also have shown better performance. A survey by Kantar indicated that networks like Gaucho Zaffari and Supermarkets BH, Minas Gerais, had increased from 13.6% in turnover this year compared to 2015. In the biggest segment chains, such as Carrefour, sugar loaf and Walmart, the increase was 5.2%.
Local products also have better sales performance, compared with global brands, according to Oliveira. Sales of specialized local or regional brands – as Piraquê and Itambé-Advanced 3.3% this year, while the 0.1% overall were stable. "The local manufacturers develop a closer relationship with local retailers and can offer facilities on the distribution and form of payment. The global brands tend to be more rigid in negotiating. Local brands operating in regional markets have above-average performance, "said the analyst.
In retail as a whole, performance may improve with the proximity of the end of the year. "Until then, we expect consumer confidence already bring reflections on sales," says Arruiz.