Brazil food service sector sees sustained sales growth amid margin pressure

The food service sector in Brazil is experiencing sustained growth, though profit margins are facing increasing pressure. According to IBGE data, the food sector grew 5.4% in July compared to the previous year, outperforming the broader services sector's 0.9% increase.

Data from the Abrasel-Stone Index shows that sales in bars and restaurants rose 7.4% in August compared to the same month last year, marking the 11th consecutive month of annual growth. This expansion was widespread, with 23 of the 24 states analyzed reporting increases, led by Paraíba and Sergipe.

Despite rising revenues, business owners are struggling with profitability. Higher costs and expensive credit are squeezing margins, as many establishments choose to absorb costs rather than pass them on to consumers to maintain competitiveness. Abrasel's executive president, Paulo Solmucci, noted that while employment levels support consumer income, the operational environment has become more difficult for owners.