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Markets & trends

Sales of fragrances and cosmetics increased by 10% in Brazilian shopping malls

Despite an overall decline in sales over the Christmas period, fragrances and cosmetics sold in shopping malls had an increase of 10% in 2014.

The year 2014 will be remembered as the worst Christmas since 2010 for the Brazilian retail sector. According to the Credit Protection Service (SPC Brasil), in the week of 18 to 24 December, retail sales turnover fell 0.7% over the previous year. In 2013, there was an increase of 2.97%, compared to 2.37% in 2012, 2.33% in 2011, and 10.89% in 2010.

Christmas decoration in shopping mall

Christmas decoration in shopping mall

Unfavourable economic conditions are said to be the main reason behind Brazilian retail’s poor performance - tighter credit rules, especially affecting lower income earners; increased inflation, leading to a reduced willingness to spend; higher dollar rates, causing prices to increase in several categories; and consumers’ mistrust in the latest economic measures put together by the government of re-elected President Dilma Rousseff.

Shopping malls, however, didn’t suffer as much. According to the Brazilian Association of Shopping Mall Stores (Alshop), stores located within shopping malls saw their sales increase by 3% over the previous year. Although positive, the performance fell below the industry’s expectations of 4.5%.

Beauty sales grew by 10%

The beauty category recorded the highest sales growth among shopping mall retailers. According to Alshop, fragrances and cosmetics sales were 10% higher than in 2013, overtaking traditionally strong segments such as toys (+9.5%) and clothing (+8.5%).

Christmas pack by Avon

Christmas pack by Avon

Christmas is also the most important time of the year for cosmetic consultants, which account for more than 4.5 million in Brazil. With promotions and packs especially created for the holiday season, sales of fragrances, makeup and cosmetics tend to increase up to 100% over the holiday period. Figures from the Brazilian Association of Direct Sales (Abved) show that, in 2013, direct sales of beauty products recorded R$41.6 million, and were expected to close 2014 with a 7% growth.

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