Brazil
Key economic/demographic statistics| Inhabitants (mn) | 191.87 |
| GDP (USD mn) | 1,712,323 |
| GDP (% real growth) | 4.8 |
| Consumer price inflation (%) | 4.8 |
| Consumer spending (USD mn) | 1,026,299 |
| Retail sales, net (USD mn) | 521,510 |
Key retail and consumer products companies
| Retailer | Category | Multinational / Domestic | Sales revenue 2007 (US$m) | |
| 1 | Carrefour Com. E Ind. Ltda | Food Retailer | French | 7,869 |
| 2 | Wal-Mart Brasil Ltda. | Food Retailer | American | 6,341 |
| 3 | Cia. Brasileira de Distribuição | Food Retailer | French-Brazilian | 5,504 |
| 4 | Makro Atacadista S.A | Food Retailer | Dutch | 2,033 |
| 5 | Lojas Americanas S.A | Food Retailer | Brazilian | 1,646 |
| 6 | Ponto Frio | General Merchandise | Brazilian | 1,630 |
| 7 | Sendas Distribuidora S.A | Food Retailer | Brazilian | 1,427 |
| 8 | Casas Pernambucanas | Speciality Store | Brazilian | 1,280 |
| 9 | B2W Cia. Global do Verejo | General Merchandise | Brazilian | 1,209 |
| 10 | Lojas Renner S.A | Speciality Store | Brazilian | 980 |
| Consumer company |
Category | Multinational / Domestic | Sales revenue 2007 (US$m) | |
| 1 | Cia de Bebidas das Américas - Ambev | Food & Beverage | Belgian-Brazilian | 6,006 |
| 2 | Unilever Brasil Ltda. | Consumer goods | Anglo-Dutch | 4,381 |
| 3 | Sadia S.A | Food & Beverage | Brazilian | 4,122 |
| 4 | Perdigão Agroindustrial S.A | Food & Beverage | Brazilian | 2,870 |
| 5 | Souza Cruz S.A | Tobacco | British | 2,434 |
| 6 | Whirlpool S.A | White Goods | American | 2,417 |
| 7 | Natura Cosméticos S.A | Consumer Goods | Brazilian | 1,625 |
| 8 | Seara Alimentos S.A | Food & Beverage | American | 1,073 |
| 9 | Eleva Alimentos S.A. | Food & Beverage | Brazilian | 1,064 |
| 10 | Aurora | Food & Beverage | Brazilian | 1,036 |
Food Retailing: Several mergers and acquisitions have happened in the industry recently, especially in the food retailing sector, which spent more than US$1.5 billion in 2007. Still, the sector is not concentrated. The top 50 food retailers account for 58% of the market. For 2008, an investment of around 1 billion dollars is predicted. Other trends include:
- Sales growth in the retailing sector due to a stable economy and an increase in consumer credit
- Investment in on line and telephone sales
- In the cosmetics sector, Brazilian producers are investing in products for the high-end markets, which tend to consume foreign cosmetic products
- In the brown goods sector, the launch of digital TV will increase the sales of TVs and adaptors
- The Brazilian white/brown goods industries are investing in research and development to improve their technology and increase export of their products
- Many shopping center groups are consolidating their position through IPOs and acquiring smaller companies. They are also partnering with foreign companies that can provide know-how and additional resources for investments
Challenges faced by companies entering the market
- Competing with consolidated companies in the sector
- Brazilian consumers are very brand conscious in the white goods industry.
- Government and legal aspects: Taxes and incomes
- Currency (R$ x US$)
Shared service centre project
The objective of this project was to transform the client’s back office function into an effective shared service centre. The client was restructuring its back office activities to support the company’s aggressive expansion plans. The company wanted more efficient control at the process level. It was also preparing to implement an ERP system.
PwC worked with the client to restructure all major back office processes in order to implement a shared service centre that would support all retail stores. The dimensions considered were process, organisation structure, layout, IT and people.
Client results:
- New operational model
- Redesign of the back office processes (accounts payable, accounts receivable, HR, tax and accounting)
- New contact centre
- Definition of key performance indicators and service level agreements
Stores project
The objective of this project was to gain efficiency and productivity in all the company’s stores. The company was seeking a new store operations model in order to maximise productivity and ultimately, sales. This included sales process, in-store back office activities, collection and credit processes and after-sales.
PwC gathered data in five types of stores, considering their size, market focus and merchandise, to understand their organisation structure, process, IT requirements and governance model. The store operations were re-designed after a pilot implementation and roll-out planning.
The results included clearer definition of roles and responsibilities among sales and back office activities within the stores.
Beverage company
The objective of the project was to implement a new model to address tax issues, focusing on process redesign, review of organisational processes, IT and training. The client wanted to implement a new, more efficient tax model by establishing controls, policies and procedures to ensure data quality.
PwC allocated a multi-disciplinary team with expertise in tax, IT, organisation and process, to analyse and design a model that would improve efficiency of the tax functions across the organisation. The scope included all inventory movement (purchasing, receipts, sales) processes, as well as tax processing and compliance. Client results:
- Improved tax efficiency
- Fewer tax processing errors and related fines
- Improved data quality, organisation and overall tax processing productivity
- Greater focus on control and compliance
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