The Brazilians are coming -- to a store near you

Wed Sep 1, 2010 11:15am EDT

Related Topics

* Boom in Brazilian traveling, spending abroad

* Fueled by rising incomes, jobs, strong currency

* Foreign spending is stretching current account deficit

By Stuart Grudgings

RIO DE JANEIRO, Sept 1 (Reuters) - The chattering line of Brazilians, many straining under the weight of their duty-free bags, stretched back hundreds of feet after a recent Monday night flight from Buenos Aires to Rio de Janeiro.

Backed by a booming economy, record job creation and a strong currency, Brazilian consumers are taking wing as they go on a spending spree from street markets in the Argentine capital to shopping malls in Florida and Chile's ski slopes.

The consumption power of Brazil's burgeoning middle class already has helped make the Latin American giant one of the world's few engines of growth, propelling its economy at a 9 percent annual pace in the first three months of 2010.

Frenzied shopping is the norm for Brazilian tourists abroad, who face some of the world's highest prices at home thanks to heavy import taxes.

These days their clout is being felt in foreign climes, helped by better access to credit and deals that allow travelers to pay in 10 or more installments.

"They're buying everything in this mall," laughed 54-year-old Brazilian Gilvania Venancio as she watched about 20 of her relatives roam through shops in Buenos Aires last weekend, buying everything from leather jackets to perfumes.

Brazilian tourists spent $8.6 billion abroad in the first seven months of 2010, a 56 percent rise on the year before, according to central bank figures released last month.

The record $1.5 billion they spent abroad in July contributed heavily to a near tripling of Brazil's current account deficit from a year ago to $4.5 billion. That makes them part of a brewing headache for the country's policymakers, because the widening of the deficit tends to raise vulnerability to foreign capital flows that fund the gap. (See [ID:nN31225911]

For an idea of where the money is flowing, visit the huge Aventura shopping mall in Miami. The mall, one of the biggest in the United States with about 24 million shoppers a year, saw a 30 percent rise in the number of Brazilian visitors in the first seven months of this year.

"When I leave the office they'll be four buses (of Brazilians) leaving in front of me," said Crystal Rouhani, the mall's tourism director.

"We have a great mix of other major markets but this year especially Brazil has been in full force."

So much so that Rouhani now plans on making two trips a year to Brazil to meet tour operators, up from one before.

BIG SPENDERS

Each Brazilian spends an average of more than $850 on a visit to the Aventura mall, four times more than Americans.

Brazilian visitors to Florida surged 29 percent last year to 712,000 and their spending jumped 36 percent, even as overall visitors to the U.S. Sunshine State dipped 1 percent, according to the Visit Florida travel marketing agency. They overtook Britons as the second-biggest visitors to Florida in the first quarter of this year and spent more than double.

Brazilian tour firm CVC, which sends 300 Brazilians to Buenos Aires every day, says many of its customers are making their first foray abroad. Demand for its World for Brazilians packages, which include a guide and interpreter for groups, has nearly tripled this year.

Income rises and credit access have swollen the middle of Brazil's "social pyramid," allowing about 23 million people to enter the tourism market, said Carlos Alberto Amorim Ferreira, president of the Brazilian Association of Travel Agencies.

"Most people start off by taking trips inside Brazil and then take an adventure in other countries," he said.

In Buenos Aires, about three hours' flight from Sao Paulo or Rio, many stores eagerly accept payment in Brazilian reais and restaurants provide menus in Portuguese. Brazilians' language competes with Spanish for the attention of shopkeepers at the huge Sunday street market in historic San Telmo.

"There are so many Brazilians in Argentina," said 26-year-old Genesio Junior Oliveira, the son of Venancio, who was making his first trip to Argentina and was on course to spend about 11,500 pesos ($2,900) on goods including a new watch that day.

"We come for the proximity and the low prices. It's so cheap here."

(Additional reporting by Luis Andres Henao in Buenos Aires; Editing by Bill Trott)

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