Brazil Mixed to soft Retail Sales in July (Ramos)

Economics Research 15 September 2026 | 8:38AM EDT

Brazil: Mixed-to-soft Retail Sales in July (Ramos)

Bottom Line: Retail sales recorded a 0.4% mom sa increase in July (below consensus for Alberto Ramos | +0.5%), with core/control sales declining 0.8% mom sa (vs consensus for -0.3% mom sa). Goldman Sachs & Co. LLC Retail sales were dragged by food/beverages (-0.2% mom sa), clothing & footwear (-2.7% mom sa), furniture & appliances (-4.9% mom sa), but mitigated by auto & auto parts (+0.3% mom sa), construction materials (+0.7% mom sa) and pharmaceutical goods (+0.6% mom sa). Credit-sensitive sectors declined 0.2% mom sa in July (-1.5% mom sa in Jun) and income-sensitive sectors declined 0.4% mom sa (+0.3% mom sa in Jun). The carry-over for 3Q26 core/control retail sales is at -0.6% qoq sa (-0.5% qoq sa for broad retail sales) and for the full year at +1.2% (+1.0% 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 2.6% yoy (3mma) in July (4.7% yoy a year ago), which, allied with a strong labor market backdrop, should support spending in the coming months.

Core/Control Retail sales: -0.8% mom sa (1.2% yoy) vs consensus forecast at -0.3% mom sa and GS at -0.1% mom sa.

Broad Retail sales: 0.4% mom sa (1.8% yoy) vs consensus forecast at 0.5% mom sa and GS at 0.5% mom sa.

1. Core/control retail sales (which exclude autos and construction materials) recorded a -0.8% mom sa decrease in Jul, below the Bloomberg consensus for a -0.3% mom sa print. The Jun figure was revised down by 20bp to 0.3% mom sa. 2. Broad retail sales grew 0.4% mom sa, below consensus for 0.5% mom sa, partially offsetting to the 1.1% mom sa decline in Jun. 3. Retail sales in credit-sensitive sectors declined 0.2% mom sa Jul (-1.5% mom sa in Jun) and income-sensitive sectors declined 0.4% mom sa (+0.3% mom sa

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in Jun). 4. The composition of the report was mixed-to-soft: half of the ten main retail sales sectors reported rising sales in Jul (3 of 8 core retail sectors). 5. Core retail sales were dragged down by food/beverages (-0.2% mom sa; 32.0% weight in the index), clothing & footwear (-2.7% mom sa), furniture & appliances (-4.9% mom sa), books & newspapers (-4.2% mom sa) and personal goods (-2.2% mom sa). We note increases in sales of fuels & lubricants (+0.3% mom sa), pharmaceutical goods (+0.6% mom sa) and sales office & IT equipment (+0.6% mom sa). 6. Within broad retail sales, auto & auto parts grew 0.3% mom sa (19.5% weight in the overall retail sales index) and construction materials grew 0.7% mom sa. 7. In annual terms, core retail sales rose 1.2% yoy in Jul (vs. +2.3% yoy consensus) and broad retail sales rose 1.8% yoy (vs. +2.0% yoy consensus).

Weak Core Retail Sales in July 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

Core/Control Retail Sales; sa 75 -8 -8 Broad Retail sales 70 Broad Retail Sales; sa 70 -10 -10 Core/Control Real Retail Sales 65 65 -12 -12 Jun-16 Jun-18 Jun-20 Jun-22 Jun-24 Jun-26 Jun-16 Jun-18 Jun-20 Jun-22 Jun-24 Jun-26

Source: IBGE, Goldman Sachs Global Investment Research Source: IBGE, Goldman Sachs Global Investment Research

Weight MoM % sa Brazil Retail Sales Volume* % of Total % of Index Dec-24…