Brazilian Retail News

Year 09 Issue # 362 São Paulo, November, 1st, 2010 Phone: (5511) 3405-6666

Retail sales rise 7.9% in September and

forecasts positive quarter

Brazilian retail sales went up 7.9% in September

year-on-year, according to the Institute for Retail
Development (IDV)’s IAV index, who compiles figures of
the country’s top 35 retailers. IAV-IDV points to a very
optimistic end of year. IDV forecasts in October retail
sales will rise up to 7.7% year-on-year, and then 7.9%
in November and 7.7% in December. FY sales are
expecte to go up by 7.1% over 2009, according to IDV.

Nike to invest in outlets to increase sales in Brazil

Sporting goods giant Nike has expanded its plans for Brazil. The company plans to build more
outlets, its value-driven format, to strengthen its presence in the country. today, the company runs
seven Nike Factory Outlets and plans another ten in the next 12 months. Nike will also bet on e-
commerce sales and high-income consumer’s Premium Mall stores, with up to ten shops in the
next year.

Direct sales up 15% in the country

Brazilian direct sales segment went up 15% in Q3 year-on-year, to R$ 6.8 billion (US$ 4 billion). The number of
active resellers went up almost 13%, to 2.7 million people, and year-to-date sales have reached R$ 18.6 billion
(US$ 10.94 billion), 19% more than in the same period in 2009.

Chanel increases Brazilian presence

Luxury group Chanel will open next week its second store in São Paulo, at Iguatemi shopping mall. With an
architecture based in the Plâce Vendôme’s shop, in Paris, the new store will offer apparel and accessories in a
200 sq.m. place. In December another store, also at Iguatemi, will sell perfumery and beauty goods.

BRAZILIAN RETAIL NEWS 1 11/01/2010

Brazilian Retail News
Year 09 Issue # 362 São Paulo, November, 1st, 2010 Phone: (5511) 3405-6666

Mobile phone base on the rise

Data released by the National Telecommunications Agency (Anatel) show

the number of mobile phone users went up 1.08% in September month-on-
month, to 191.5 million people. There were added 2.043 million subscribers in
the period.

Consumer confidence up 0.1% in October

Brazilian consumer confidence remained almost stable in October

month-on-month, according to Fundação Getúlio Vargas (FGV). The ICC
index went up 0.1% over September, far below the 0.7% rise in September
over August. In October, ICC reached 121.8 points, in a 0-200 scale.

DIY sales rise 3.56% in September

DIY retail sales rose 3.56% in September year-on-year, according to the Brazilian Building Supplies Association
(Abramat). Over August, however, sales dropped 1.26%. Year-to-date sales rose 15.1% over the first eight months
in 2009.

BRAZILIAN RETAIL NEWS 2 11/01/2010

Brazilian Retail News
Year 09 Issue # 362 São Paulo, November, 1st, 2010 Phone: (5511) 3405-6666

Momentum
The landscape, from a broader view
Marcos Gouvêa de Souza - CEO, GS&MD - Gouvêa de Souza

A series of events has allowed us to take a broader view of the specially positive moment Brazil has been living,
when looking from outside in. First of all, some meetings in Paris, followed by visits in Lyon, France, to know the new
Carrefour Planet concept, opened in late August as part of a global effort to reinvent the hypermarket business.
After that, three days of discussions on the perspectives of the global retailing, in the World Retail Congress,
event GS&MD - Gouvêa de Souza represents in Brazil and that took place in Berlin, Germany, gathering around
1,100 retail enterpreneurs and executives from all over the world, with a strong presence of European, Asian and
Middle Eastern companies.
To this meeting there followed the second Ebeltoft Group’s annual event, celebrating 20 years of its foundation
with a historic meeting in Cambridge, England, where the 18 members from 16 countries debated the situation and
the moment of each market. GS&MD - Gouvêa de Souza is a member of Ebeltoft Group since 2002 representing
Latin America and is on the group’s Board since 2004.
Of all those events and the many discussions and debates in Paris, Berlin and Cambridge, one can reach
some conclusions that could be considered as a broader view of the global market and its impacts on Brazil.
1) The global economy has been living a period of cautious recovery, based on the growth of the US market
and the almost consensus approach is that this recovery will be slow, with tepid growth, thus affecting global
import and export levels and bringing trouble to the Brazilian companies most relying on the foreign market;
2) The gradual recovery of the foreign market will be faster in the countries where there is possible to resume
the growth of the domestic market, as is the case of Germany and the UK, who have had a better retail performance;
3) China and India are still driving the global economy but, in the Indian case, its decision to not open the
domestic market to foreigners may generate some kind of consequence, as US president Barack Obama indirectly
pointed out last week when visiting the country. It is important to consider China and India, in the Global Retail
Maturity Index (GRMI), are among those countries lagging behind, with a small growth in the recent past, despite
the presence of global players in Chinese retail, although with relatively low market share;
4) Other Asian markets present stronger growth potential, but their sizes are a restrain, the same happening
in many countries in the Middle East that have been affected by the global crisis, but with performances leveraged
by the recovery of the oil prices;
5) Europe still suffers the consequences of the global cooldown. The average growth of the Euro zone
countries for 2010 will be in the 1.6% range, after falling 4% in 2009. Unemployment continues to be the biggest
problem, reaching 9.4% in 2009 and being expected to rise to 9.6% in 2010. In the Eastern European countries,
in spite of the economic recovery of nations as Russia and Ukraine, with forecast growth of 4.9% and 4.3% in
2010, respectively, the performance has not been enough to revert the global depression and unemployment
scenario, that tends to keep the market sliding in the next years;
6) In all events we could take part on, Brazil has never been mentioned in a such positive way. There is a
general perception the mix of factors that allowed the country to be less affected by the global economic crisis
remain and that some global recovery may boost the country even more.
In the next week, we’ll continue this analysis.

Gouvêa de Souza & MD Desenvolvimento Empresarial Ltda.

Av. Paulista, 171 - 10º floor
Paraíso – São Paulo – Brazil – Zip Code: 01311-904
Phone: (5511) 3405-6666 – Fax: (5511) 3263-0066
E-mail: gsmd-de@gsmd.com.br
Home-page: www.gsmd.com.br

BRAZILIAN RETAIL NEWS 3 11/01/2010