SAO PAULO—While still more than a week away, the World Cup has already had a major impact on retailers in the self-described “Country of Soccer,” as football-mad Brazilians feverishly scoop up new televisions.
Brazilian TV production – much of it by international companies like Panasonic Corp and LG Corp in a tax-free zone in Amazonas state – has risen 25 percent by some measures, while the country’s leading electronics retailers are reporting a spike in sales in recent months.
Stores are also coming up with novel methods to get Brazilians to pull the trigger on new TV sets, with many offering major discounts.
Electronics and appliance chain and local e-commerce standout Magazine Luiza SA, for instance, is allowing customers to pay for new TVs in part by trading in their old sets.
“We’re seeing sales get stronger week after week as we get closer to the Cup,” said commercial director Fabio Gabaldo.
The boost is not unique to Brazil, which is the only country to have appeared in every tournament in history.
In neighbouring Peru, which will make its first World Cup appearance in 36 years, first-quarter TV sales rose 25 percent from a year earlier, according to pollster GfK. That nation’s congress came under fire recently for planning to buy 60 TVs and a number of mini-fridges, purchases that many Peruvians suspect are related to the World Cup, a charge legislators have denied.
The rise in sales in Brazil shows how enthusiasm for the Cup shows no signs of fading even after an embarrassing exit from the 2014 tournament, which was played at home and sparked a number of major corruption investigations.
Various other sectors, including brewing and food retail, are set for a major boost during the Cup itself, potentially providing a small shot of adrenaline for an economy that has struggled to recover from a deep recession and most recently has been roiled by a truckers strike.
January-to-March industrial production for the electronics category, which includes TVs, rose more than 26 percent from the same period a year before, according to government statistics.
In the interior of impoverished Amazonas, a state dominated by lush rain forest but also a major producer of TVs because of tax incentives, production jumped some 47 percent.
In a conference call earlier in the month, Carrefour Brasil’s chief executive of retail, José Luis Gutierrez, said electronics sales were showing a pick-up in May and are set to be “very strong” in the second quarter because of the tournament.
Major electronics retailer Via Varejo SA has boosted inventories to deal with the event, the company’s newly installed CEO, Peter Paul Estermann, told investors in late April.
Some retailers are betting on fans’ superstition to help them sell televisions, especially after Brazil was unceremoniously axed from the 2014 contest in a 7-1 blowout loss to Germany.
An ad on Magazine Luiza’s website asks readers, “Are you really going to watch Brazil on the same TV as the 7-1 match?”
By Gram Slattery