CIELO S A : Notice to the Market - Retail sales decline 12.6% in January 2021, according to ICVA

Retail sales decline 12.6% in January 2021, according to ICVA

Intensification of the pandemic impacted the result

Brazilian retail sales fell 12.6%, excluding inflation, in January compared to the same month of 2020. In nominal terms, which reflect sales revenue received by retailers, the ICVA fell 6.3%.

This drop would be lower if we excluded the calendar effects, which had a negative impact on the retail result in the month. Without such effects, the index for the month declined 10.3%, excluding inflation. In nominal terms, with the calendar adjustments, the ICVA decreased 3.9%.

The worst-performing sectors were Bookshops & Stationery Stores and Supermarkets & Hypermarkets. Drugstores & Pharmacies and Tourism & Transport, on the other hand, accelerated in relation to the pace reported in January 2020.

"The intensification of the COVID-19 pandemic led to a decline in revenue from com-merce. The January result was in line with that of the previous month. The Bars & Res-taurants segment stands out among the most heavily hit," said Gabriel Mariotto, Cielo's Business Analytics Director.

Year on Year Retail Sales Performance

BRAZIL 9.1% 6.9%

May-20

Jan-20

Feb-20

Mar-20

Apr-20

Jun-20

Jul-20

Aug-20

Sep-20

Oct-20

Nov-20

Dec-20

Jan-21

Nominal ICVA

Deflated* ICVA

*Adjusted by national Consumer Price Index (IPCA) according to the sectors contained in ICVA

INFLATION

The Broad Consumer Price Index (IPCA), calculated by the IBGE, moved up 4.56% in the last 12 months, dropping 0.25% in January. Housing was the group that contributed the most to this decline, although Food & Beverages picked up speed in the same period.

Considering the IPCA weighted by sector and ICVA weights, broad retail inflation to-taled 7.1%, decelerating in relation to the index registered in the previous month.

SECTORS

After discounting inflation and with calendar adjustments, the Non-Durable Goods and Services macro sectors slowed down. Meanwhile, Durable Goods and Semi-Durable Goods improved in January.

In the Non-Durable Goods macro sector, Drugstores & Pharmacies was one of the sec-tors that recorded growth. In Services, the positive highlight was Tourism & Transport.

In Durable Goods, Apparel was one of the sectors that slowed down.

REGIONS

All regions of the country decelerated in the month according to the deflated ICVA and with calendar adjustment. In the Northeast region, the decline was 13.1%, followed by the South (-10.8%), Southeast (-10.2%), Midwest (-6.7%) and North (-6.1%) regions.

According to the nominal ICVA - which does not discount inflation -, the highlight was the North region, which increased 1.2%, followed by the Midwest (0.4%) The other regions decelerated as follows: Northeast (-6.1%), Southeast (-4.6%) and South (-3.5%).