- Rafael Barifouse
- From BBC News Brasil in São Paulo
The advance of vaccination and the signs of economic recovery observed in the first months of the year were not enough to prevent the consumption of Brazilians from reaching its worst level since the beginning of 2019, according to the study Consumer Insights, by Kantar consultancy.
The index, which takes into account consumption inside and outside the home, had a drop of 6% between April and June this year, which indicates a retraction compared to the previous year.
Although indoor consumption — of items such as food and cleaning and hygiene products — has grown 25%, outside the home — of items such as meals, mineral water, energy drinks, juices, sandwiches, cakes, chocolates and cereal bars — dropped 36%.
The combination led to the worst result of the survey since it started being carried out in early 2019. The index, which was positive around 4% over the past year, plummeted in the first quarter of this year and was negative at 5% . Now, it got even worse.
The only good sign came from young people between 18 and 29 years old from classes A, B and C, segments in which consumption outside the home had a slight increase. But it is still far from being the reality of older and poorer Brazilians.
“We started to see an increase in consumption outside the home with the progress of immunization and the drop in rates of contagion, but the population over 50 still remains isolated, and we don’t see the same growth trend among young people in the classes D and E,” says Elen Wedemann, president of Kantar’s Worldpanel division, responsible for the survey.
unemployment and inflation
One of the reasons would be unemployment, which grows along with poverty. Kantar data show that, in 17% of Brazilian homes, at least one person lost his job this year. Of these, 80% were from classes C, D and E.
The rate has improved from the end of 2020, when 28% said at least one person was laid off last year. “There is a movement to resume employment, but it favors the A and B classes more,” says Wedemann.
At the same time, emergency aid has shrunk and reached fewer people this year. This further reduced the consumption power of the poorest families. In parallel, high inflation works against any benefit that the timid recovery of the economy brings.
“We are at a very delicate moment, in which these social classes are beginning to suffer more and more and need to reduce and review everything they consume inside and outside the home,” says Wedemann.
As the majority of the Brazilian population is in classes C, D and E, if these people buy less, the economy as a whole suffers. Likewise, evaluates Wedemann, only a stronger economic recovery will generate enough work for so many people.
“There is no way to think of a general recovery without a specific plan that stimulates sectors that generate employment opportunities for the C, D and E classes — and we haven’t seen that yet.”
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