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SAO PAULO, Oct 29 (Reuters) - GPA SA , Brazil’s biggest retailer, posted an unexpected quarterly loss on Thursday due to weak sales, faster inflation and costly layoffs, highlighting the deepening crisis for retailers in Latin America’s largest economy.
GPA’s net loss of 122 million reais ($32 million) compared with a profit of 391 million reais a year earlier and missed an average forecast for a profit of 52 million reais in a Reuters survey of analysts.
With Brazil’s economy suffering its worst recession in 25 years and consumer prices climbing nearly 10 percent in a year, GPA has struggled to maintain supermarket sales, while demand plunged at its home appliance division Via Varejo SA.
Net sales for the group edged up less than 3 percent due to a 23 percent drop in revenue at Via Varejo and modest 7 percent sales growth in food retail.
One-time expenses soared to 200 million reais, nearly seven times as much as a year earlier, as the company paid the costs of cutting about 9,000 employees, or roughly 6 percent of its payroll.
GPA’s workforce has shrunk about 11 percent this year from an all-time high of 160,000 in January, when it boasted one of Brazil’s biggest private-sector payrolls.
Unemployment in Brazil has jumped to a nearly six-year high as retailers and service employers cut jobs that had been offsetting a prolonged industrial slowdown.
The economic headwinds, as well as signs that France’s Carrefour SA, direct rival of controlling shareholder Casino SA, is gaining ground in Brazil have led to a sharp selloff wiping out half of GPA’s market value this year.
The company has tried to offset weak traffic at its hypermarkets by shutting down and overhauling underperforming stores, while opening smaller neighborhood shops and cash-and-carry wholesale stores under the Assai brand.
GPA confirmed it plans to open 70 new convenience stores, 10-12 Assai locations and five of its high-end Pão de Açucar supermarkets this year.
$1 = 3.85 Brazilian reais Reporting by Brad Haynes and Alberto Alerigi Jr.; Editing by Diane Craft and Leslie Adler