Brazil’s largest supermarket owner Companhia Brasileira de Distribuição has announced rises in sales and income for the second quarter of 2005, but complained that shaky consumer confidence and high interest rates were hitting sales.
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Gross sales revenue was 3.792bn reais, compared with 3.747bn in the same period a year earlier. Net income rose to 64m reais from 58m a year ago.
Gross sales for the first half were 7.735bn reais, compared with 7.162bn last year. Net income for the half was 122m reais, compared with 86m a year ago.
CBD operates under three formats: supermarkets (Pão de Açúcar, CompreBem and Sendas), hypermarkets (Extra), and consumer electronics/home appliance stores (Extra-Eletro).
Same store sales in the second quarter registered a nominal growth of 0.7%, representing a real decrease of 6.6%, the company said. This performance is primarily the result of an unfavourable calendar (strong comparison base), since last year Easter was in the second quarter and this year it was in the first quarter. Besides, the performance in this quarter was strongly impacted by a less favourable consumption environment in the country, with a decrease in the level of consumer confidence and high interest rates.
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By GlobalDataSame store sales in real terms, deflated by the IPCA index, registered a 1.6% drop in
the first half of the year. If we consider food inflation, calculated by the FIPEAlimentação index, which in our view better reflects CBD’s reality, same store sales registered a real growth of 1.1%, the company said.
It is important to highlight that food products with high sales volume – rice, soybeans, milk and meat, among others – presented significant price deflation over the first half of 2005, CBD said.
The number of clients in same stores grew by 1% in the first half of the year. On the other hand, in face of the decrease in the level of consumer confidence, we observed a reduction in the average ticket in real terms, mainly due to a decrease in the consumption of non-food products and discretionary items.
