2024-01-03 00:10:17
© Reuters. Commerce predicts smaller losses for next year
The calendar is in favor of commerce in 2024. With fewer national mobile holidays falling on working days, retailers should have a smaller volume of extra expenses to open stores on holidays.
Contrary to what you might assume, opening on these days has a negative impact on retail and represents a loss. This is because operating on holidays is not always accompanied by a counterpart in sales.
In the accounts of the National Confederation of Commerce of Goods, Services and Tourism (CNC), the loss generated by the opening on holidays in 2024 should total R$27.92 billion. It is a figure almost 4% lower compared to that recorded in 2023, when the loss was R$28.99 billion.
In practice, it is around R$1 billion less in losses. This has important weight in a segment that is performing poorly and is expected to close this year with sales growth that does not reach 2% compared to 2022. The estimated values of losses take into account inflation for the period.
Taking into account Black Consciousness Day, celebrated on November 20th, which will be a national holiday starting next year, 2024 will have 7.5 days of mobile holidays that will fall on working days, compared to 8 in 2023. The number Breaking holidays into working days is because study is considered part-time work on national holidays that fall on Saturdays.
In 2024, five mobile national holidays will be between Monday and Friday, compared to eight in 2023. They are: Universal Fraternization (1/1), Labor Day (5/1), Proclamation of the Republic (11/15) , Black Awareness Day (11/20) and Christmas (12/25). The other holidays, such as Independence Day (7/9), Nossa Senhora Aparecida (12/10) and All Souls’ Day (2/11) will fall on Saturdays. Good Friday, Carnival and Corpus Christi, which are fixed weekday holidays, fall on Friday, Tuesday and Thursday, respectively, and were not considered in the study.
“The main impact of the holiday calendar is on the profitability of commerce”, says Fabio Bentes, economist at CNC and responsible for the study. Each holiday reduces the average profitability of commerce as a whole by 1.29%, says the economist. The projections consider data from expanded retail, calculated by the Brazilian Institute of Geography and Statistics (IBGE). Extended retail includes sales of materials and construction and the automotive sector.
The lowest number of holidays in 2024 on working days was recently celebrated by President Luiz Inácio Lula da Silva. In the CNC’s accounts, considering all economic activities (not just commerce), each national holiday on the Brazilian calendar has a negative impact of 0.12% on the Gross Domestic Product (GDP), the sum of all the wealth produced in the country.
Labor is still what generates the most cost
The main cost of opening businesses on holidays is labor. Therefore, sectors that employ a greater number of workers and also those that pay a higher average salary are those most negatively affected by holidays.
According to a study by the National Confederation of Commerce of Goods, Services and Tourism (CNC), 40% of the retail losses expected for next year due to operation on holidays are in the hypermarket and supermarket segments (R$ 6.38 billion), which employ a lot of people, and in the automotive trade (R$6.34 billion), which pays higher wages.
Fabio Bentes, economist at CNC, warns that the expense of opening an establishment on a holiday should weigh more heavily on retailers in 2024. In mid-November, a new rule from the Ministry of Labor was published that provides that work on Sundays and public holidays it needs to go through collective negotiations between unions and employer representatives. And this could result in higher remuneration.
The information is from the newspaper The State of S. Paulo.
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