Read this week's most important news on the Brazilian retailing. In this edition:
* Casino increases stake in Grupo Pão de Açúcar;
* Burger King finds partner to open 1,000 stores in Brazil;
* Cencosud wants Carrefour stores in Brazil
Read this week's most important news on the Brazilian retailing. In this edition:
* Casino increases stake in Grupo Pão de Açúcar;
* Burger King finds partner to open 1,000 stores in Brazil;
* Cencosud wants Carrefour stores in Brazil
Read this week's most important news on the Brazilian retailing. In this edition:
* Casino increases stake in Grupo Pão de Açúcar;
* Burger King finds partner to open 1,000 stores in Brazil;
* Cencosud wants Carrefour stores in Brazil
th , 2011 Phone: (5511) 3405-6666 BRAZILIAN RETAIL NEWS 1 20/06/2011 Casino increases stake in Grupo Po de Acar French group Casino signalled it is interested in consolidating its stake in Grupo Po de Acar, Brazils largest retailer, by purchasing an extra 3.3% share in the company, for US$ 363 million, now owning 37% of the chain. Casino and Po de Acars owner Abilio Diniz are in collision route since last month, when Diniz contacted rival Carrefour to discuss a possible merger without consulting Casino frst. Burger King fnds partner to open 1,000 stores in Brazil US fast food chain Burger King reached a deal with private equity group Vinci Partners to create a master franchisee that will manage and develop the brand in Brazil. Vinci has invested R$ 500 million (US$ 312.5 million) and intends to open 1,000 stores in the next fve years. Today, BK runs only 108 restaurants in the country. Giraffas opens frst store in the US Giraffas, Brazils fourth-largest fast food chain, has opened its frst store in the United States, in Miami, a region with a good presence of Brazilians. The company will also expand its chain in Brazil and will refurbish, in the next two years, all its 400+ stores in the country. Brazil is the 7th best emerging market for apparel retailers An AT Kearney report shows China continues to be the most attractive emerging market for apparel retailers, due to its huge population, increasing income and by the growing consumers sense of fashion. The country is expected to grow in the 20% per year range for the next fve years. UAE and Kuwait complete the top 3 best emerging markets. Brazil is in the 7th place, lagging behind Russia, Saudi Arabia and India. Brazilian Retail News Year 10 - Issue # 392 - So Paulo, June, 20 th , 2011 Phone: (5511) 3405-6666 BRAZILIAN RETAIL NEWS 2 20/06/2011 US franchises prepare to grow in Brazil Two weeks ago, four US franchises exhibited at ABF Franchising Expo, Latin Americas largest trade fair: Johnny Rockets and Beef OBradys (restaurants), Martinizing Dry Cleaning (dry cleaners) and Mathnasium (mathematics schools). They all said they are very confdent in the development of business in the country and will look for regional master franchisees to speed up expansion and better understand the particularities of each region. Cencosud wants Carrefour stores in Brazil Cencosud, one of the largest retailers in Latin America and fourth-largest in Brazil, started talking to French Carrefour to purchase its Brazilian assets, according to Chilean newspaper Financiero. Sources close to the company have said Cencosuds CEO Horst Paulmann has been talking to high executives of Carrefour to try to reach a deal. Magnolia Bakery to open shops in Brazil next year Magnolia Bakery, one of New Yorks most famous bakeries, intends to open stores in Brazil from next year on. Steven Abrams, owner of the chain, said he is working on a deal with a local group, but no decision has been made yet. Abrams also said he intends to open six to ten shops as a frst step. Valentines Day up 10.8% in Brazil Data released by the National Retail Executives Confederation (CNDL) show retail sales went up 10.8% in the Valentines Day (June, 12th) season this year, over the same period in 2010. The result was close to the trade group forecast of 10% and above the 7.23% growth reported last year. Brazilian Retail News Year 10 - Issue # 392 - So Paulo, June, 20 th , 2011 Phone: (5511) 3405-6666 BRAZILIAN RETAIL NEWS 3 20/06/2011 Its the confdence, stupid! Marcos Gouva de Souza - CEO, GS&MD - Gouva de Souza Momentum In the real world the Brazilian economy has already showed signs of slowdown and retail sales have not been as vigorous as in the recent past in most of the country. A process that became clear in the end of April. As offcial statistics agency IBGE showed Brazils April retail sales data, with an average growth of 10% that led year-to-date sales to 7.5%, in the stores and in the e-commerce retailers have already been feeling consumers are more cautious, due to a change of mood that is a result of a series of reasons. First of all, it is important to remember retail sales have been growing in a consistent and intense way in the last three years: 5.9% in 2009, in the middle of an international crisis; 10.9% in 2010, one of the worlds top three growth indexes; and in the January/May period this year, 7.5%, driven specially by durable goods, as home appliances, computers, electronics and mobile phones. Overall, all retail segments have been having a signifcant growth and the Brazilian fgures are still one of the three best in the world, when considering the 2009-2011 period. The reasons for this growth are the rise in the job market and income, increasing the mass wage (today 5% above last year). The credit offer has also been rising, in spite of the increasing interest rates. Since the end of the last year the government has been increasing the interest rates to stop demand from growing too much, as it is concerned with the rise of infation. The thing is that, for the average Brazilian consumers, the spending pattern is much less rational and much more emotional, reason why the rise of interest rates have not been entirely translated into less purchases yet. So, the critical drivers of spending were keeping a positive trend and have left sales to rise in the next fve months this year. The shopping spree started hitting on some hurdles, as the more expensive credit available, reducing the short-time appetite, as older purchases still need to be paid. Overdue payments, however, have been going up since February above the seasonal trend, after hitting all-time low levels in December, 2011 and January, 2011, according to the countrys Central Bank. But the single factor showing a more relevant behavior change in the period has been the consumer confdence, that, after reaching its peak in December, has been falling down and dropped in May to the lowest level since July, 2010. The reasons for this recent corrosion of the consumer confdence have been the food infation and the rising fuel costs, whose effects have been strengthened by the rising overdue payments and by a food of negative news in the press, related to political issues. The sum of these elements create a rational cooling effect on the more emotional consumer behavior, that had been boosted by an income rise, low unemployment rate and strong credit offer. A slowdown in the food infation and the fall in the fuel prices, as well as a more peaceful political scenario, shall help keeping retail sales growing until the end of the year, however in a lower pace than last year. Consumer confdence is a collective perception one cannot control, but it is strongly impacted by the daily activities, feelings, concerns, worries, fears and distrusts, as well as by the rational income, employment and credit factors. One cant forget it. Brazilian Retail News (BRN) is a weekly newsletter published by GS&MD - Gouva de Souza with the most important news on the Brazilian retailing. The content can be freely used, once the source is quoted. If you want any information on BRN or our services, please send an email to publicacoes@gsmd.com.br or access GS&MD - Gouva de Souza at www.gsmd.com.br. Gouva de Souza & MD Desenvolvimento Empresarial Ltda. Av. Paulista, 171 - 10 foor Paraso So Paulo Brazil Zip Code: 01311-904 Phone: (5511) 3405-6666 Fax: (5511) 3263-0066