Retail crisis goes beyond interest rates: the challenge of delinquency and productivity

The prevailing narrative that reduces the Brazilian retail crisis to a side effect of monetary policy ignores deep structural pathologies eroding the sector. While the Selic rate remains at 14.00% per year, the retail industry is facing the exhaustion of an easy-credit model that masked operational inefficiencies for years. The true crisis lies in productivity failures and the mismatch between capital allocation and cash flow generation capacity. Key market indicators highlight this tension: the 12-month IPCA is at 4.44%, while the commercial dollar, at R$ 5.1862, has risen 1.13% in the last 7 days. As the era of abundant liquidity ends, retailers face a painful deleveraging process. Only companies with solid balance sheets and technological adaptability are expected to survive the current credit contraction, as the market shifts focus from gross revenue to EBITDA margins in upcoming quarterly earnings reports.