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Could retail sales during the World Cup see more commercial investment in Brazil?

Date added: 20th August, 2010 at 14:56
(view all articles from August, 2010)

Categories: Economy, Tourism, Salvador, Natal, Florianopolis, Rio, World Cup 2014

People seeking opportunities for commercial investment in Brazil may be interested to know that recent figures show a rise in retail sales in South Africa when the country hosted the World Cup.

Latin America's largest economy may also see the benefits the competition brought, as it will be holding the tournament in 2014.

There was a surge in the amount of food, drinks and household appliances sold in South Africa in June, during the sporting event.

Household appliances and furniture transactions increased by 17.7 per cent, while businesses selling refreshments saw their sales rise by 3.4 per cent.

Textiles, footwear, clothing and leather product retailers saw purchases surge by 13.1 per cent and cosmetics, toiletries, pharmaceutical and medical goods were up 7.9 per cent.

Overall, retail trade in June was a seasonally adjusted 1.8 per cent higher and had increased by 7.4 per cent compared with the same period the year before.

Mike Schussler of Economists.co.za told the Financial Times' Beyondbrics the benefits the tournament brought to the country were not only short term.

"The people who kept their jobs in the recession have done very well," he told the news provider, explaining that the competition brought extra workloads for employers and these individuals had seen higher salaries as a result.

Indeed, the World Cup may have had a big impact on the nation, as citing the country's Finance Ministry, Bloomberg reported the influx of around 500,000 tourists may have driven an expansion in the economy of about one per cent.

When the competition comes to Brazil, it will be held across 12 cities; however, according to the Brasil 2014 website, which stadiums the matches will be played in is unknown.

As many as 19 arenas have been shortlisted, including Maracana Stadium in Rio de Janeiro, Mangueirao Stadium in Belem, Estadio Mineirao in Belo Horizonte and Estadio Mane Garrincha in Brasilia.

There may also be an increase in commercial investment in Florianopolis, as the city's Estadio Orlando Carpelli has made the list.

Meanwhile, the Estadio Estrela dos Reis Magos is a proposed stadium that will be constructed if it is selected for the games.

Its development may see a large amount of investment in Natal - the city in which it is located, while money could also be ploughed into Salvador - where another arena could be built.

However, the investment in Rio de Janeiro and the other chosen cities, alongside the benefits of retail sales increases, may not be the only boost to Brazil.

According to a report by Ernst & Young and the Fundacao Getulio Vargas, the economy will "snowball".

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