A glum Christmas for Brazil retailers - and little cheer ahead
By Brad Haynes
SAO PAULO Dec 11 (Reuters) - Brazilian retailers are expecting their worst Christmas season in a decade and signs are pointing to an unhappy New Year ahead.
Shoppers are cautious and retail unions are ready for layoffs, adding to headaches for recently re-elected President Dilma Rousseff, whose push for fiscal austerity to win back investor confidence comes just as an economic slump hits home.
Consumer confidence is at depths last seen in the 2008 financial crisis, as the fourth straight year of high inflation and mediocre growth in Latin America's largest economy take a toll on the jobs market.
The average family's debts have also swollen to nearly half of their annual income, up from one third in 2008, making Brazilians wary of new borrowing and vulnerable to interest rates now at a three-year high.
"Credit cards, utilities - it seems like all the bills are going up these days. You've got to save on something," said Maria Fernanda Pieroni, 30, an information technology specialist at a mall in Sao Paulo looking for cheaper gifts this year.
About 43 percent of Brazilians are planning to spend less on Christmas than they did last year, while just 12 percent aim to spend more, according to a survey by the Getulio Vargas Foundation, a local think tank.
More bargain hunting is good news for a handful of low-cost retailers such as Lojas Americanas SA, whose flexible sales mix and small-ticket items have helped shield sales growth from the broader slowdown. But most consumer companies, such as cosmetics maker Natura SA and apparel chain Cia Hering, are likely to continue to struggle with weak demand.
Brazil's National Confederation of Commerce estimated Christmas sales volumes will advance just 2.6 percent from a year ago - the weakest outlook since 2004. Continuación...