Brazil Firmer Than Expected Core Control Sales

Economics Research 13 August 2026 | 8:55AM EDT

Brazil: Firmer Than Expected Core/Control Sales; Weak Broad Retail Sales in June (Ramos)

Bottom Line: Retail sales recorded a -1.0% mom sa variation in June (above consensus for Alberto Ramos | a 1.4% contraction), with core/control sales rising by 0.5% mom sa (vs consensus for 0.0% Goldman Sachs & Co. LLC mom sa). Retail sales were dragged by weak clothing & footwear (-2.6% mom sa) and fuel & lubricants (-1.7% mom sa). Credit-sensitive sectors declined 1.7% mom sa June (+2.0% mom sa in May) and income-sensitive sectors rose by 0.5% mom sa (-0.3% mom sa in May). On a quarterly basis, core retail sales declined 0.4% qoq sa during 2Q26 (1.2% qoq sa in 1Q26) and broad retail sales declined -1.0% qoq sa (+1.1% qoq sa in 1Q26). The carry-over for 3Q26 core/control retail sales starts at 0.4% qoq sa (-0.8% qoq sa for broad retail sales) and for the full year at +1.8% (+0.9% for broad retail sales). The monthly prints have been very volatile given the introduction of a new broader sample and the fact that the seasonal filters show large discontinuities at certain ranges.

Going forward, we expect retail activity to benefit from continued robust federal fiscal transfers to low-income households with a high propensity to consume, the expansion of real household labor and non-labor disposable income, targeted lending program, the increase in the exemption threshold for personal income tax, and measures to ease debt service—mitigated by tight domestic monetary and financial conditions, high inflation, high levels of household indebtedness, and low levels of economic slack (unemployment rate below the NAIRU and output gap in positive territory). Gross household real disposable income expanded a high 2.5% yoy (3mma) in June (4.6% yoy a year ago), which, allied with a strong labor market backdrop, should support spending in the coming months.

Core/Control Retail sales: 0.5% mom sa (2.9% yoy) vs consensus forecast at 0.0% mom sa and GS at 0.3% mom sa.

Broad Retail sales: -1.0% mom sa (4.9% yoy) vs consensus forecast at -1.4% mom sa and GS at -1.1% mom sa.

1. Core/control retail sales (which exclude autos and construction materials) recorded a 0.5% mom sa increase in Jun, above the Bloomberg consensus for a 0.0% mom sa print. The May figure was revised up by 13bp to 0.3% mom sa. 2. Broad retail sales declined 1.0% mom sa, above consensus for -1.4% mom sa, adding to the 0.3% mom sa decline in May and the fourth consecutive monthly decline. 3. Retail sales in credit-sensitive sectors declined 1.7% mom sa Jun (+2.0% mom

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sa in May) and income-sensitive sectors rose by 0.5% mom sa (-0.3% mom sa in May). 4. The composition of the report was mixed-to-soft: four of the ten main retail sales sectors reported rising sales in May (4 of 8 core retail sectors). 5. Core retail sales were dragged down by fuels & lubricants (-1.7% mom sa), clothing & footwear (-2.6% mom sa), books & newspapers (-9.9% mom sa), and sales office & IT equipment (-1.3% mom sa). We note increases in sales of food/beverages (+1.1% mom sa; 32.0% weight in the index), furniture & appliances (+0.4% mom sa), pharmaceutical goods (+0.2% mom sa), and personal goods (+2.4% mom sa). 6. Within broad retail sales, auto & auto parts declined 1.5% mom sa (19.5% weight in the overall retail sales index) and construction materials declined by 3.5% mom sa. 7. On a quarterly basis, core retail sales declined 0.4% qoq sa during 2Q26 (1.2% qoq sa in 1Q26) and broad retail sales declined -1.0% qoq sa (+1.1% qoq sa in 1Q26). 8. In annual terms, core retail sales rose 2.9% yoy in Jun (vs. +2.0% yoy consensus) and broad retail sales rose 4.9% yoy (vs. +4.1% yoy consensus).

Weak Broad Retail Sales in June Moderating Retail Activity

Index; s.a.; 2022=100 Index; s.a.; 2022=100 Percent change, year ago; 12-mma Percent change, year ago; 12-mma 115 Core/Control Retail Sales; sa 115 10 10 Broad Retail sales 110 Broad Retail Sales; sa 110 8 Core/Control Real Retail Sales

Jun-16…