Brazil retail sales decline for second straight month in August, struggles to beat recession

Retail sales in Brazil declined for the second straight month during the period of August, indeed a sign that the economy struggles to come out of the ongoing phase of recession even as supermarket sales stood firm.

Brazil’s retail sales volumes excluding cars and building materials fell 0.6 percent in August from July after seasonal adjustments and in line with forecasts in a Reuters poll, data released by the country’s statistics agency IBGE showed Tuesday.

Further, sales fell 5.5 percent from the year-earlier period, down from a decline of 5.3 percent in July and compared with expectations for a 5.0 percent drop, the data further added. Sales witnessed sharp declines in six of the eight sectors covered by IBGE, with the lead confirming in office equipments, pharmaceuticals, furniture and books.

In contrast to the overall decline in sales, supermarket and food sales, accounting for a chunk of the consumer budget, rose 0.8 percent in August, compared to a month earlier period. A broader retail measure including automobile and building materials sales, which are more volatile, dropped 2.0 percent in August from July and 7.7 percent from August 2015.

Meanwhile, a higher rate of unemployment amid peak interest rates have hurt retailers in the wake of global economic slowdown even as prospects of a recovery boosted consumer confidence within the region, Reuters reported.