Brazil Retail Sales Jumped in May as Shoppers Adjusted to New Situation --Update

SAO PAULO--Brazil retail sales unexpectedly jumped in May as more consumers adapted to shopping during the coronavirus pandemic and businesses in some parts of the country reopened following almost two months of social distancing measures.

Sales increased a seasonally adjusted 13.9% in the month, the biggest increase in 20 years, and fell 7.2% from a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday. In April sales dropped a revised 16.3% in the month. Economists had been expecting an increase of about 6%-7%.

Brazilian states began shutting down non-essential activities, including most shops, toward the end of March, and in April the country's retail sales suffered the biggest drop on record. In May, activity increased from a low level as many businesses began selling online and found other ways to boost sales amid the pandemic.

"They had to learn to sell through new channels," Carlos Pedroso, senior economist at Banco MUFG Brasil in Sao Paulo, said. "Companies that hadn't been online started selling that way, more began delivering, and they were able to boost sales."

The jump in May is unlikely to be repeated in coming months because it came after steep declines in March and especially April, Mr. Pedroso said. But with more towns allowing shops to reopen in June and July, the outlook is for more improvement in retail sales figures in the next few months.

"The second half should be a period of gradual recovery," Mr. Pedroso said. "People will be cautious, partly out of concern about being infected and partly because it's a bad time to go deeper into debt.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com


  (END) Dow Jones Newswires
  07-08-20 0954ET
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