A Brazil Win at World Cup Will Mean Over US$ 500 Million in Losses for Rio’s Businesses

Brazil fansIs the World Cup good for the Brazilian economy? There is a lot of debate about whether or not there are losses of productivity due to World Cup soccer games. But the president of the Rio de Janeiro Shopkeeper Club (Clube dos Diretores Lojistas), Aldo Gonçalves, says there is no doubt that sales drop significantly every time Brazil plays.

“Sales fall around 50% and that is a fact. Stores close early before the games and most do not open again. Only shopping centers open again after a game and even so business will be very weak,” says Gonçalves.

He estimates normal sales in the state of Rio de Janeiro at around 200 million reais (US$ 110 million) per day. So, there is a loss of 100 million reais (US$ 55 million). “Only small shops that sell cheap stuff for soccer fans are doing well. They sell hats, T-shirts, flags and horns (vuvuzelas, etc),” reports Gonçalves.

Meanwhile, the director of the Rio Commercial Association, Daniel Plá, says that if Brazil makes it to the World Cup final total losses for Rio businesses will reach 1 billion reais (US$ 552 million).

And about a third of that will never be recuperated, says Plá, as those are losses in restaurants and bars, and so-called “compulsive buying” by shoppers that ceases to exist during soccer games.

Meat Consumption

Some commerce seems to benefit from the days of Brazil’s games even though the economy suffers due do the working day lost. June 20, Sunday, the day Brazil played against Ivory Coast, the consumption of meat rose by 50% over the average meat trade on Sundays. This according to the director of the Association of Retail Trade in Fresh Meat of São Paulo, Ramiro Casa Nova.

This increase, however, doesn’t occur when the game is on a week day like the Brazil-Chile match, which happened on a Monday. Casa Nova says that when the games are during the week, the consumption of meat is lower. That’s because many fans watch these games at their place of work and have no time to organize a barbecue, for example.

According to the association’s president, Manoel Henrique Faria Ramos, annual consumption per capita of meat has remained around 82 pounds, although the country has expanded its population, livestock and exports. “I believe this average will be maintained,” he observes.

A survey by the Economic Research Institute Foundation (Fipe), on the third week of June showed that prices of beef fell by an average of 0.34% and the part most appreciated for the barbecues, the sirloin, had even a more expressive fall (0. 42%). Pork was on average 0.39% cheaper and birds, 1.63% more affordable.

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