Our View: After disappointment in the previous month, both the core and broad retail sectors have positively surprised market expectations. Despite the improvement in the margin, the growth was highly concentrated in supermarkets, with segments more related to credit still showing moderation. Today’s results, along with previously known indicators, point to a 0.2% QoQ decline in GDP in 3Q23 (1.9% YoY).
The core retail sector advanced 0.6% MoM (Buysidebrazil: 0.5% MoM; Bloomberg: 0.1% MoM; Broadcast: 0.1% MoM), and the broad retail sector rose 0.2% MoM (Buysidebrazil: 0.1% MoM; Bloomberg: 0.0% MoM; Broadcast: 0.0% MoM), both in line with our projection.
As expected, the result was driven by a new increase in sales of supermarkets and hypermarkets, favored by lower food inflation during the period. Furniture and appliances also grew during the period, but only offsetting the decline observed in the previous month and still accumulating a drop in the quarter. Other credit-related items recorded a decrease during the period.
We expect the retail sector to continue its moderation in the next quarter, given the gradual slowdown in the labor market and the still restrictive monetary policy.
