Sales of Appliances Fall 16.5% in Brazil

The sale of appliances have dropped 16.5% in South American's largest economy. In particular, the fall in sales comes mostly from the "brown" line appliances, such as televisions and audio equipment.

Reasons for the drop in sales include the difficulty of consumers getting credit and low consumer confidence leading consumers not to want to take on debt.  The fall in appliance sales has led to numerous store closings of major appliance brands like Ponto Frio.

According to results released by the Brazilian Institute of Geography and Statistics (IBGE) on Tuesday, retail sales in volume have dropped for 14 consecutive months in Brazil. Overall, the decrease has totaled -7.3%. Appliances have fallen for 16 consecutive months.

The brown line of appliances tend to be more expensive and sales often depend more on financing for consumers, something which is rare today in Brazil.

Via Varejo, owners of Casas Bahia and Ponto Frio, closed 21 stores in the first trimester of 2016 due to low sales of appliances. In 2015, the company had closed 39 stores.

According to the association of manufacturers, Eletros, sales of brown line appliances have fallen 40% in 2016. The country produced 2.5 million televisions through April, a drop of 29.72% compared to the same time the year before and a decrease of 58% compared to 2014.

Lourival Kicula, president of Eletros, the devices have high penetration in the market. In times of crisis, there is little motivation to upgrade.

Right now, the expectation is that sales and production numbers could get worse in the second half of the year.

For more go to Supermercado Moderno (in Portuguese) Appliance Sales, Production Down