Brazilian consumers intend to spend more on Children's Day
Economics
11 October 2017

Brazilian consumers intend to spend more on Children's Day

Brazilians area ready to spend more on presents this Children’s Day, according to the Consumer Survey carried out by FGV’s Brazilian Institute of Economics (IBRE).

Brazilians area ready to spend more on presents this Children’s Day: the average intention to spend reached BRL 82.50 this year, compared to BRL 78.60 in 2016. This data comes from Sondagem do Consumidor [Consumer Survey], carried out by FGV’s Brazilian Institute of Economics (IBRE), covering 1,830 thousand interviewees in September. The indicator that gauges the intention to spend rose 5.0 points – from 59.3 to 64.3 points –, breaking the downward trend started in 2014.

“The more favorable conditions in the macroeconomic environment, with dropping interest rates, lower inflation, and a slight reduction in household indebtedness, ultimately led consumers towards the highest intention to spend on Children’s Day in the last two years. This result is attributed to a higher purchasing power among households (income exceeding BRL 9,600), as families have managed to control the household budget and now have good short-term prospects,” said Viviane Seda Bittencourt, coordinator of IBRE’s Consumer Survey.

The researcher pointed out that the indicator rose in three of the four income ranges, except for the income range between BRL 2,101 and BRL 4,800, where the indicator dropped 0.7 point. On the other hand, consumers with household income under BRL 2,100 are the ones expected to spend more in presents this year, compared to 2016 – around 14.9%, or from BRL 47 to BRL 54, on average. Regarding the presents, toys were the most mentioned (56.4%), followed by clothing items (25%) and books (5.4%).

 

Toys and clothes below inflation. Services are more expensive

The average variation in product and service prices for Children’s Day was 4.13%, above the inflation rate accumulated between October 2016 and September 2017, calculated by IBRE’s Consumer Price Index (CPI), which stood at 3.17%.

The good news comes from the price variation in the most sought products: toys (gift expenses) rose only 0.63% over the last 12 months, on average. Some of the highlights are bicycles (-2.76%), dolls (-1.95%) and sports equipment (-1.93%). Children’s clothing prices rose 1.15%, which is less than half of the inflation rate for the period, and recreational games rose 5.89%.

Leisure expenses showed the highest variation (4.76% on average), mainly driven by sweet and savory items (7.62%) and showrooms (movie theaters, concerts and theaters), which rose 6.72%.

“The slowdown rate was three percentage points over the last couple of years, falling from 9.19% in 2015 to 7.19% this year. The slowdown between 2016 and 2017 was three points, following the inflation downward trend,” said André Braz, Coordinator of IBRE’s CPI and responsible for the survey.

According to the economist, it is still a time to tread lightly, despite the good news. “The job market’s conditions are still not favorable. We shouldn’t see any major growth in sales, despite the more attractive price tags. The economy is still stagnant and the job market scenario excludes several countries, which are still in no condition to start spending,” said Braz.

Go to the website to read the complete study.