World Cup Euphoria Results In Millions In Losses For Brazilian Retailers

By Dialogo
July 02, 2010

Brazilians’ fanatic devotion to watching their national team’s matches in the
2010 World Cup in South Africa is causing millions in losses to retailers in Rio de
Janeiro and São Paulo, according to studies released.

On the other hand, the businesses profiting from the event are small
retailers dedicated to the sale of items directly linked to the tournament, such as
T-shirts, horns, flags, and hats.

In Rio de Janeiro sales are halved on the days that Dunga’s team is playing,
and things are even worse when the result is a ‘long weekend.’

This will happen with Brazil’s next game, since the team will face the
Netherlands Friday morning, and if Brazil wins, fans are unlikely to return to work
before Monday.

“Stores close earlier and don’t reopen. Only the shopping centers reopen, and
even there, there’s very little traffic,” according to Aldo Gonçalves, president of
the Rio de Janeiro Store Managers Club.

According to the retailer, stores have suffered an overall drop in sales of
more than 55 million dollars, except for those dedicated to selling small items
directly linked to the World Cup.

“Those people are happy with the World Cup, but they’re a small percentage,”
explained Gonçalves, quoted by the official news agency Agencia Brasil.

But the bottom line is even worse if the projected losses in the event that
the ‘yellow-green’ team reaches the tournament final are added in.

“If Brazil reaches the final, we’re talking about one billion reais (around
$550 million) in losses for retailers in the entire state of Rio de Janeiro,” warned
Daniel Plá, director of the Rio Commercial Association.

In São Paulo, meanwhile, retailers start to lose customers two hours before
the Brazilian team takes to the field for each match, according to a study by the
São Paulo Commercial Association (ACSP).

When the national team plays in the afternoon, sales are higher in the
morning, but not to the extent of compensating for the losses.

The study includes data from the Central Credit Protection Service showing a
drop of up to 95% in sales on credit during the matches.