Retail in Brazil: No more beginners’ luck

5/22/2017 - Report
ic_blogtagEconomic OutlookBrazilRetailSector Risk

​Retail sales are slipping into negative territory as Brazil goes out of recession because of the soaring unemployment rate. Given the poor consumption prospects, the situation is not set to improve in 2017. 

Brazilian retailers’ financial standing dramatically deteriorated over the last two years. Net gearing (indebtedness) climbed to 110% in 2016, up from +70% in 2014. 

Apparel and food & drugs have shown resilience while electronics is most at risk starting 2017 with a staggering indebtedness of 300% and profits at a low 2.9%.