Department Stores in Brazil

PROSPECTS

Department stores in Brazil keep their mid-priced positioning, driven by Pernambucanas and Havan

Pernambucanas’s stores are mainly located in shopping centres, thus benefiting from the fact that Brazilians perceive shopping centres as safer than stand-alone stores; however, there are a large number of stand-alone Pernambucanas stores located in central urban areas.

Havan expands outside of the major cities

Havan, meanwhile, is benefiting from focusing its expansion on smaller cities, where it faces less competition from other department store players. In addition, Havan stores are in most cases away from city centres.

Lojas Yamada faces difficulties

Lojas Yamada, in turn, operates mostly in Brazil’s northern states and as of 2018 was facing a major crisis due to the high level of indebtedness of its customers who used to shop using Lojas Yamada store cards, as well as internal disputes regarding management. There are no luxury department stores in Brazil.

COMPETITIVE LANDSCAPE

Department store players rely heavily on store and co-branded cards to keep consumers spending

In Brazil, it is common for retailers to work with store cards, which is in order to keep consumers spending even if they have little access to credit. Over the years, large retail chains started to phase out their operations with store cards in order to launch co-branded credit cards in partnership with large retail banks, such as Itaú Unibanco and Banco Bradesco.

Pernambucanas offers flexibility with its cards

Pernambucanas store cards offer customers benefits, such as special conditions when paying for appliances and clothing, as well as the possibility to make the payment in up to 12 fixed instalments and choose the best due date for billings. In the case of one of Pernambucanas’s co-branded personal credit cards, operated by MasterCard, customers can use the card in several establishments worldwide, as well as pay for their goods in up to 24 fixed instalments and benefit from the MasterCard Surpreenda loyalty programme.

Havan offers just the one card

Unlike Pernambucanas, which works with two kinds of store cards and four co-branded personal credit cards, Havan works with only one store card. The company’s card is free from annual fees and customers have up to 40 days to start paying for their purchases.

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