Business owners are more optimistic than consumers this Christmas

Household indebtedness and unemployment left consumers more cautious
经济学
19 十二月 2018
Business owners are more optimistic than consumers this Christmas

Trade executives expect sales to go up this year. This optimistic trend is partially followed by consumers, who should spend more with Christmas presents. However, such improvement was much milder within this group compared to 2017. These are the data revealed by special studies conducted under the Consumer Survey and Trade Survey of FGV’s Brazilian Institute of Economics (IBRE).

According to the survey, 43.1% of 888 business owners interviewed think that Santa will be more generous this year compared to 2017 – a 25.5-point positive balance compared to those expecting a penny-pinching Christmas. This optimistic trend is led by the supermarket and megastore and furniture and household appliances sectors, which recorded 50.6 and 56.6 points, respectively – regarding the difference between optimistic and pessimistic respondents. The fabrics, clothing and footwear segment showed milder results: 12.7 points.

More temporary job positions and hiring opportunities

Another important piece of data that raises confidence is the opening of temporary job positions. A total of 43.8% of business owners indicated they will hire temporary workers for the holiday season. Despite a certain concern regarding the sales volume in Christmas, the fabrics, clothing and footwear segment showed the highest intention to hire temp workers (72.0%), followed by supermarkets and megastores (64.6%) and furniture and household appliances (60.6%).

Two of them also rank among sectors with the highest intention to convert these temporary jobs into fixed positions: other retailers (91.4%), fabrics, clothing and footwear (84.7%), and furniture and household appliances (69.5%). Supermarkets and megastores should only keep 36.8% of the new job positions.

“Business owners should have a better holiday season than last year. Despite the still lean comparison basis, and following a troubled period throughout the year, with supply issues arising from the truck drivers’ strike and a higher level of uncertainty due to the election period, the fact that these retailers expect an upsurge in sales and more employees compared to last year suggests that they expect this recovery trend seen in recent months to continue”, said Rodolpho Tobler, coordinator of IBRE’s Trade Survey.  

Wary consumers

The Christmas Shopping Intent Indicator – which gauges how much consumers intend to spend during the holidays – rose from 60.3 points in 2017 to 62.8 points this year. This slight upturn is attributed to the fact that more Brazilians intend to spend more in 2018, besides fewer people wanting to cut down on expenses. In practical terms, this means that the trade segment could see an upsurge in sales this year.

As for prices, most Brazilians (30.9%) should spend somewhere between BRL 21 and BRL 50 in Christmas presents, followed by 30.7% who intend to spend between BRL 51 and BRL 100. Average Christmas present prices dropped 9.7% – From BRL 104.50 to BRL 94.40. Only 2.1% of consumers intend to spend more than BRL 500 – the lowest level in the historical series. The most popular items are clothing and toys – mentioned by 42.3% and 17.8% of respondents, respectively. Other highlights in consumer preferences include perfumes, mentioned by 4% (ahead of footwear), and consumer electronics.