Brazilian Retail News

Year 09 Issue # 363 São Paulo, November, 8th, 2010 Phone: (5511) 3405-6666

Retail sales rise 9.2% in October

Brazilian retail sales went up 9.2% in

October year-on-year, boosted by building
supplies (+17.2%), according to Serasa
Experian. Month-on-month sales rose 1.6%,
leveraged by a 1.7% increase in supermarket,
hypermarket, food and beverage; and 0.9% in
furniture, electronics and computers. Year-to-
date, retail sales have gone up 9.9%.

Hooters invests R$ 1.5 million to relaunch brand in Brazil

Aiming to open 20 restaurants in Brazil (16 franchised units) until 2014, with sales up to R$ 100 million (US$
55.56 million), US brand Hooters has invested R$ 1.5 million (US$ 0.83 million) to start a new venture in the
country. Located in São Paulo, the store has 30% of the menu adapted to the local taste.

Christmas will have more

imported goods

The improvement of the low-end

consumers’ purchasing power will bring
a 20% increase in the sales of imported
goods this Christmas, according to
estimates of the São Paulo State
Supermarket Association (Apas). The
price of imported goods shall fall by 5%
this year, specially due to the current
exchange rate. Non-food sales are
expected to grow by 30%, while food
sales shall rise 10% year-on-year.

BRAZILIAN RETAIL NEWS 1 11/08/2010

Brazilian Retail News
Year 09 Issue # 363 São Paulo, November, 8th, 2010 Phone: (5511) 3405-6666

Pão de Açúcar forecasts a 35% Christmas sales

rise

With new and exclusive products, Pão de Açúcar, Brazil’s top

retailer, forecasts a 35% increase in beer sales and 20% in
seasonal goods in the next Christmas season. Dry fruits must
present a 10% rise, seasonal fruits will grow by 15% and wine
sales will go up by 15%, leveraged by private label bottles.

Renner profits soar 86.3% in the quarter

The strong winter, lower default rates and the rising operating
margins made Renner, one of Brazil’s top department store sales,
increase its net profits by 86.3% year-on-year, to R$ 57 million
(US$ 31.67 million). Net sales went up 16.8% year-on-year, to R$
568.7 million (US$ 315.94 million), while same-store sales rose
10.5%. Improvements in the cost management and inventory structures and less discount sales helped the
company increasing its gross operating sales by 1.3 point, to 47.3% of total sales.

Walmart forecasts 50% rise in Christmas’ PC and games sales

Walmart said next Christmas its computing and games sales will soar more than 50% over the same period
last year, with strong demand for laptops, accessories and TV screens. Games’ sales are expected to double,
boosted by the launch of Pro Evolution Soccer for Playstation 2 and 3, Wii, Ebox 360 and PC.

Online retail sales to rise by 40%

Data released by the Brazilian E-commerce Chamber (camara-e.net) forecast online retail sales will rise by
40% over the same period last year, making total sales reach around R$ 15 billion (US$ 8.33 billion). Computing
and electronics shall be the best-selling categories, followed by books, CDs and DVDs. Camara-e.net said online
Christmas sales account for 16% of the segment’s total year revenues.

BRAZILIAN RETAIL NEWS 2 11/08/2010

Brazilian Retail News
Year 09 Issue # 363 São Paulo, November, 8th, 2010 Phone: (5511) 3405-6666

Momentum
The landscape, from a broader view - part 2
Marcos Gouvêa de Souza - CEO, GS&MD - Gouvêa de Souza

Here, more conclusions of the broader view of the global market and its impacts on Brazil.

7) It is reasonably clear events such as the World Cup and the Olympic Games, as well as the
pre-salt oil, have created a particularly interesting situation. It’s only a matter, for the country, of being
able to structure and organize itself to profit on all that will be presented, promoted, highlighted and
spoken. It seems to be consensual that the chance and some vision have led the country to a quantic
transition point and that all, apparently, depends exclusively on how we’ll manage the road to the
future in a competent and visionary way;
8) It seems to be a consensus, in the foreign analysts’ view, that the presidential elections in
Brazil will not affect, at least on the short term, the Brazilian economy and market behavior;
9) The more obvious consequence is today’s attractiveness of the Brazilian market, due to its
own merits and the lack of other options as interesting as the ones the country offers today;
10) Among the structural aspects to be highlighted, one shall mention the average age of the
Brazilian population, below 30 years-old, that brings a strong disposition to spend and try on new
products and services. One must mention also the urban population above 80% of total Brazilians,
one of the world’s highest, generating consumers who communicate and are easily accessed by the
mass and segmented media;
11) Another factor to be highlighted is the disposition for the new and modern, that put Brazilian
population among the ones most likely to become Neoconsumers and Metaconsumers, as recent
studies performed by GS&MD - Gouvêa de Souza have showed;
12) The attractiveness of the Brazilian market is already making the global retail conglomerates
focus the country, the ones already here investing on expansion and many others wanting to arrive,
alone or partnering with other companies;
13) The Brazilian retail had in the 2004/2009 period an 87.7% growth in its maturity level, the
highest among all markets studied by GS&MD - Gouvêa de Souza to create the Global Retail Maturity
Index (GRMI), as a result of its effort to reposition itself and of its strategic thinking, due to the
stabilized and better planned economy;
14) The sum of all those factors, if somehow point to highly positive elements, also brings in
concerns on the inevitable increase in the competitivity level, that shall pressure retailers’ gross
margin, in spite of increasing sales;
15) And, finally, companies must learn to think in terms of a stable economy for the next ten
years, process in the recent past regarded as secondary and that now needs to be brought back, so
the real strategic thinking can be done.

Gouvêa de Souza & MD Desenvolvimento Empresarial Ltda.

Av. Paulista, 171 - 10º floor
Paraíso – São Paulo – Brazil – Zip Code: 01311-904
Phone: (5511) 3405-6666 – Fax: (5511) 3263-0066
E-mail: gsmd-de@gsmd.com.br
Home-page: www.gsmd.com.br

BRAZILIAN RETAIL NEWS 3 11/08/2010