Brazil consumers drive Pão de Açúcar profits

Grupo Pão de Açúcar, Brazil’s largest retailing conglomerate, more than doubled its net income in the fourth quarter as the country’s ever richer consumers snapped up everything from chocolate biscuits to washing machines.

The group, which is controlled by France’s Casino and Brazil’s Diniz family, said net income rose to R$447m ($268.3m) for the last three months of 2010, compared to R$203.5m in the same period of 2009.

Net revenue surged to R$11.04bn in the fourth quarter from R$6.04bn a year earlier, boosted by sales from Casas Bahia and Ponto Frio, the two home appliance retailers Pão de Açúcar acquired in 2009.

“Brazil is no longer just a promise,” said the group in a statement late on Wednesday night.

“In the next few years, many factors – the World Cup, the Olympics, a good time for the property market and even government programmes – will heat up the consumer market, which in practice means rising purchasing power and the entry of more consumers into the middle class.”

But Pão de Açúcar’s results could add to concerns that the country’s credit boom, which is largely thanks to rising consumption, could be getting out of control.

The banking sector has also had the best earnings season on record thanks to a near-20 per cent surge in lending last year.