FEATURES
concerning the marketing and operational structures that are also linked to these franchises. Market demand, especially from lower-income
consumers, has risen in recent years. On the other hand, this increased demand has generated profound changes in the supply of products and services, which is currently limited by the organic, internal growth of the leading companies, instead of by the development and expansion of operations and brands. The retail market, while extending its offer, is not
necessarily diversifying products, services and brands. Rather, it is mainly increasing points of sale for existing operations.
Employees The role of employees in shopping centers is also very
important. Legal issues, high labor costs and employee qualifications all need to be understood before developing a new business in Brazil. According to ALSHOP (the Brazilian Association of
Tenants in Shopping), currently about 1.1 million employees work for retailers in shopping centers, with around 81,000 employed in shopping-center administration.8 So new market entrants need to grasp the relationship between employers and employees, as well as the social risks inherent in any labor relationship. Most of the fundamental rules of Brazilian labor
legislation are set out by Decree-Law No. 5.452/43, known as CLT (Consolidation of Labor Laws),9 which has protective rules in favor of employees, establishing various obligations for employers and ensuring many rights for employees. While Brazilian labor law deserves more detailed
analysis, one should remember that such legislation needs to be analyzed in association with other complementary rules involving unions. Therefore, it is necessary for companies to be prepared
to comply with legislation, so that the risks and contingencies arising from conflicts between employers and employees can be mitigated. Beyond the legal issues, worker qualifications must be
considered. At the upper levels of organizations— directors, managers and supervisors—most professionals exhibit considerable expertise, training and knowledge. They represent a significant share of the economically active population, with access to high-quality educational institutions (including abroad), and can be counted on to perform efficiently. But the Brazilian population is still
very young, and, particularly at the entry level, many employees lack the training required to perform technical activities related to the retail industry. A major challenge for companies wishing to establish
themselves in Brazil, therefore, is employee development, education and training. In this way, productivity, performance and profitability will be enhanced through the collaboration of more prepared and qualified employees.
Consumers Increased worker incomes, greater accessibility to
information and previously unavailable products and services are transforming the consumer landscape, providing more opportunities for retailers. Brazilian consumers more than ever before want products that offer value and cutting-edge technology. Since Brazilian consumers have the buying power and
willingness to spend, the nation’s luxury retailers have expanded. Many of these latest entrants come from the United States and Europe. A good example of this fact is the performance of Louis Vuitton stores in Brazil, which, individually considered, achieve significant profits compared with other company stores around the world.
Government The Brazilian government can be considered the most
challenging player for companies who want to develop their business in the nation. Ensuring that a business fully complies with detailed requirements set by the government for a newly constructed shopping center or store is essential to prevent future liabilities and unexpected contingences against the project. These requirements originate from three Brazilian government levels: federal, state and municipal. Three issues that every business must deal with are
especially important: 1) Obtaining licenses and permits for business
operation is a process quite complicated by the three- level governmental system. However, these permits and approvals are required almost simultaneously. Stated simply, the main licenses and permits necessary for operating a shopping center or store are:
approval from the municipality, requiring detailed demonstration of all aspects of the project related to engineering, as well as the impact of the development on the neighborhood in which it will be built;
8
www.alshop.com.br 9 The full version of Decree-Law No. 5.452/43 can be found at:
http://www.planalto.gov.br/ccivil_03/decreto-lei/Del5452compilado.htm.
INTERNATIONAL COUNCIL OF SHOPPING CENTERS 21 3 RETAIL PROPERTY INSIGHTS VOL. 20, NO. 1, 2013
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45