UPDATE 1-Brazil retail sales in January take biggest annual drop in 13 years
(Adds categories, other details, background) BRASILIA, March 10 (Reuters) - Retail sales in Brazil fell in January at their fastest annual pace in nearly 13 years, statistics agency IBGE said on Thursday, suggesting consumer confidence's recent improvement from record lows had yet to boost demand. Excluding cars and building materials, retail sales volumes fell 1.5 percent in January from December, while economists in a Reuters poll had expected a 0.6 percent decline. This was retail sales' second consecutive decline, following a 2.7 percent drop in December. The index showed declines in six of eight categories, including fuel, apparel and furnishing items. Supermarket and food sales, the single most important part of the retail survey, fell 0.9 percent. Sales fell 10.3 percent from a year earlier, steeper than the 7.1 percent decline in December. The drop was the sharpest since March 2003. Retailers in Brazil are closing stores, slashing investments and laying off workers as demand slumps in the second year of a severe economic recession, which is expected to be the country's worst in more than a century. Consumer confidence rose slightly in January and February, according to a private survey, mostly due to higher expectations about the economy in coming months. However, inflation remained at a 12-year high, and companies cut 100,000 jobs in January, keeping a lid on sales. A broader measure of retail sales that includes cars and building materials dropped 1.6 percent in January from December after seasonal adjustments, IBGE said. (Reporting by Silvio Cascione; Editing by Lisa Von Ahn)
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