The Minister of Finance, Dário Durigan, stated that the crisis in some Brazilian retail companies is caused by three main factors. In an interview with Jornal da Record, he explained that these factors significantly affect the dynamics of the retail sector.
The first factor mentioned by the minister is high interest rates, which directly harm companies in the sector. The second factor is the change in consumer habits, who have preferred to buy online instead of going to physical stores. According to Durigan, this shows that there is a dynamic within the sector that is being affected by the interest rate.
The third element mentioned by the minister is the loss of financial revenue from cards offered by the retail companies themselves. He explained that these companies offered customers cards for installment purchases, such as furniture, and obtained double revenue: the revenue from the product sale and the financial revenue from interest charged on this installment plan. With competition from other card operators, this source of income was reduced.
Durigan added that companies increased their dependence on physical sales precisely at the moment when consumers migrated to digital consumption, which worsened the financial situation of these retail companies.
