Imports, weak sales put pressure on retailers
Brazil is beginning to implement a new model for imports as fashion retailers are under pressure from weak sales, high inventories, and the need to show investors a response before the end of the year.Companies have been able to apply for an exemption from the 60% import duty on imported products worth up to $50 since August 1. To do so, they must join the federal government’s "Remessa Conforme" plan and provide various information to Brazil’s Federal Revenue. This regime, which is expected to benefit foreign platforms, according to local chains, has sparked protests from domestic retailers whose sales have been weak this year.The performance below expected in the second quarter spread to the retail sector, mainly affecting the apparel segment, as well as sporting goods and electronics. Chains are now in the process of negotiating or receiving the final part of the purchase of products for Black Friday, which will be on November 24 this year. Digital is at the core of the dispute between domestic retailers and foreign platforms.According to businesspeople and analysts consulted by Valor, there is an expectation that even in this complex scenario, amid changes in import rules, local chains will be able to recover demand and reverse the numbers of the first half."The scenario for the rest of the year is still a bit hazy," said Eduardo Terra, head of BTR Educação e Consultoria and member of some retailers’ boards of directors. "There is even a possibility that the new remittance rules will actually improve the environment, due to the expectation of greater control by the tax authorities and the greater fear of consumers of being caught and taxed. There are already new signs that goods from China are coming in at a slower pace."According to a businessperson in the textile sector, "The first half was very difficult, textile retail fell by 8%, and there is still a factor of concern about these uncertainties regarding the new import program," the source said."On the other hand, there is a positive environment with lower interest rates, which generates more confidence, we have the ‘Desenrola’ initiative, which frees up some income, and we do not have elections and the World Cup, which greatly affected the sales base of 2022. So, there’s still some optimism in the air, despite the uncertainties," the source added.Foreign platforms and carriers that join the program "Remessa Conforme," which concerns shipments of up to $50, can offer consumers the...
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