Retail is expected to post a loss of R$27.92 billion in 2024, a reduction of 4% compared to 2023, due to fewer public holidays on working days
The calendar is in favor of trade in 2024. With fewer national moving holidays falling on working days, retailers should have a smaller volume of extra spending to open stores on public holidays.
Contrary to what you might think, the opening these days has a negative impact on retail trade and represents a loss. This is because operations on public holidays are not always accompanied by sales.
In the accounts of National Confederation of Trade in Goods, Services and Tourism (CNC), the loss generated by the opening during the 2024 holidays is expected to amount to R$ 27.92 billion. This is a figure almost 4% lower than that recorded in 2023, when the loss was R$28.99 billion.
In practice, this is about R$ 1 billion less in losses. This has an important weight in a segment that is performing poorly and which is expected to close this year with sales growth that does not reach 2% compared to 2022. The estimated values of losses take into account inflation for the period.
Taking into account Black Consciousness Day, celebrated on November 20, which will be a national holiday starting next year, in 2024 there will be 7.5 days of rolling holidays that will fall on working days, compared to 8 in 2023. The number Breakdown of holidays on working days because studying is considered part-time work on national holidays that fall on a Saturday.
In 2024, five moveable national holidays will be between Monday and Friday, compared to eight in 2023. These are: Universal Fraternization (1/1), Labor Day (5/1), Proclamation of the Republic (11/15) , Black Holiday Awareness Day (20/11) and Christmas (25/12). Other holidays, such as Independence Day (7/9), Nossa Senhora Aparecida (12/10) and All Souls’ Day (2/11) will fall on Saturday. Good Friday, Carnival and Corpus Christi, which are fixed weekday holidays, fall on Friday, Tuesday and Thursday respectively and were not considered in the study.
“The main impact of the holiday calendar is on the profitability of trade,” says Fabio Bentes, CNC economist and head of the study. Every public holiday reduces the average profitability of the entire trade by 1.29%, explains the economist. The projections consider expanded retail trade data, calculated by the Brazilian Institute of Geography and Statistics (IBGE). Extended retail includes construction and materials sales and the automotive sector.
The lowest number of public holidays in 2024 on working days was recently celebrated by President Luiz Inácio Lula da Silva. In the CNC’s accounts, considering all economic activities (not just trade), each national holiday on the Brazilian calendar has a negative impact of 0.12% on the Gross Domestic Product (GDP), the sum of all the wealth produced in the country.
Labor-intensive segments
The main cost of opening a business on holidays is labor. Therefore, sectors that employ a larger number of workers and also those that pay a higher average salary are the ones most affected by the holidays.
According to the study, 40% of next year’s expected losses in the retail sector due to holiday activity occur in the hypermarket and supermarket segments (R$6.38 billion), which employ many people, and in the automotive trade (R$6.34 billion). , which pays higher wages.
Bentes warns that the costs of opening a business on public holidays are expected to weigh more heavily on retailers from next year.
In mid-November, a new regulation from the Ministry of Labor was published which provides that Sunday and public holiday work must be subject to collective negotiations between unions and employer representatives. And this could lead to a higher remuneration.
Before the 2017 labor reform, work done on non-working days was paid double the hour worked, the economist recalls. With the labor reform, companies do not have to pay double and compensation is now done via a time bank. In 2021 there was a new change to the current rules and Sunday and public holiday working was permanently permitted for several sectors.
Source: Terra
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