Finance Minister Dario Durigan Attributes Retail Crisis to High Interest Rates and Digital Shifts

Finance Minister Dario Durigan identified three specific factors causing a crisis in several Brazilian retail companies. High interest rates are the first element he cited. Consumers now prefer buying goods online rather than visiting physical stores, according to Durigan. This shift reduces revenue for businesses that rely heavily on brick-and-mortar sales. A second factor is the loss of financial income generated from credit cards issued by these retailers. Companies previously earned money from interest charges on these loans when customers purchased items like sofas on credit. However, Durigan noted a drastic reduction in this financial revenue compared to the past. The third element involves competition between store-issued card operators and fintech services. Many consumers have switched to alternative payment methods instead of using retailer cards. As a result, companies are becoming more dependent on physical sales volume. Durigan mentioned that this situation has led to a series of recovery proceedings in the country. Major networks such as Casas Bahia and Marabraz are among those seeking judicial recovery. These legal actions generate thousands of job losses across the sector.