One of the main names in Brazilian commerce, the businessman Abilio Diniz said he sees no signs of a retail crisis. The segment, which has been suffering throughout 2023, since the fraud of Americanas (AMER3)currently in judicial recovery, is still one of the most discounted on the stock market, with some rare exceptions.
How to invest in a real estate fund? Sign up and receive E-book + Videos with analyst recommendations for you
For Diniz, chairman of the board of Península, an investment company, and advisor for the operations of the Carrefourboth globally and in Brazil, Brazilian consumption is evolving and this is a good sign for retail.
Consumption is improving, says Abilio Diniz
“Look, there is a misconception that retail in Brazil is in crisis. Taking the macroeconomy, family consumption in Brazil, in the first quarter, declined a little. In the second, it already rose again, it is rising again in the third and will close the year with an increase”, he said, during the edition of Macro Vision, event held this Thursday (9) by Itaú BBA, Itaú’s investment arm.
“Auxilio Brasil, in the previous government, and today Bolsa Família is also providing assistance for consumption”, stated the businessman. “If I take the data from ABRAS (supermarketers’ association), it projects positive growth for the supermarket sector”, he says.
According to Abilio Diniz, “the market is not loving retailers very much and there are some reasons for that”. However, he highlights that it is necessary to make some sectoral considerations. When it comes to food, he states that “there is no crisis at all”. Things get bad, he points out, in durable goods retail. “When you take durable goods, which demand credit, you will have difficulty, you will have challenges because the interest rate is very high”.
In the short and medium term, although the Central Bank is in the midst of a cycle of monetary normalization, it does not see improvements in this sector. “Ah, the interest rate is lowering. Now it will improve a lot. For whom? A person who is going to buy a refrigerator, a television, does it make a lot of difference whether the Selic rate is 12.25% or close to 9.50%”, he asks, and then responds: “It is still very high. So, there is no clear prospect of activating the credit market here in Brazil.”
Rubens Ometto and Eugênio Mattar
Along with Abilio Diniz, businesspeople Rubens Ometto, president of the board of directors of Grupo Cosan, and Eugênio Mattar, president of the board of directors of Localiza, participated in the event. They spoke about the prospects for Brazil, especially next year.
Mattar said he was cautious about the future. “Brazil is a country with very unstable stability,” he said. “So, considering that, I will say that we are very cautious.”
Ometto complained mainly about the fiscal framework project, launched to replace Michel Temer’s Spending Ceiling.
“One of the pillars of the fiscal framework is that you can only spend a percentage of what you earn in excess. This makes the revenue and the supervisory body want to collect. And they don’t always obey the rules. This means that legal security is not smooth, which is fundamental for us, business people”, he highlighted.
Financial Intelligence is a journalistic channel and this content should not be interpreted as a recommendation to buy or sell investments. Before investing, check your investor profile, your objectives and always stay well informed.