End of 6×1 scale will be "overwhelming" for shopping malls, says Abrasce
The impact caused by the end of the 6×1 work schedule, PEC (Proposed Amendment to the Constitution) currently being processed in Congress, will be "overwhelming" for the sector represented by Abrasce (Brazilian Association of Shopping Centers), according to the president of the association, Glauco Humai, to CNN Money this Friday (26), during an event in São Paulo.
The association's estimated losses are around R$ 15 billion in the first year of validity, if the proposal comes into force.
Humai projects a scenario of layoffs, business closures and "hundreds of thousands of people migrating to informality".
According to the executive, as the segment depends on intensive labor, the change will force companies to completely rethink the current operating model of the projects, which will directly affect labor costs and the pace of hiring.
The entity's criticism focuses on the political rite and the speed of proceedings in Brasília.
"We don't necessarily disagree with the fact of changing the 6×1 scale, it is a necessary evolution that has to be discussed, but at the right time and in the right way", ponders Humai.
"Today we question the way it is being implemented much more, without discussion, without study, without time, in an election year. In other words, the way is very complex. We will discuss the merits later."
Economic studies of the sector show that the global impact on the shopping mall and retail ecosystem could be even more profound in the long term.
The association's projections indicate a potential decline in the sector's annual revenue, which would cause sales to decline.
The fear of sector leaders is that the additional cost generated by the PEC will act as an economic "meteor" for retailers, causing a crisis that is worse and more difficult to overcome than the period of restrictions caused by the Covid-19 pandemic.
The greatest vulnerability lies with small traders, according to the association. Of the total of 115 thousand retailers operating in shopping malls across Brazil, around 60% are small operations, which have lean structures with just four or five employees.
For this group, the need to hire new employees to cover the two mandatory days off would increase personnel costs by up to 25%.
The situation is described as even more dramatic for the 16,000 kiosks spread throughout the enterprises' corridors: as they generally work with just one or two employees, the labor cost of these operations would simply double.
The debate takes on historic contours at a moment of celebration for the sector. Abrasce celebrates 50 years of founding in June.
Humai highlighted the meeting of suppliers, consumers, entrepreneurs, administrators and retailers to project the future of the sector amidst challenges.
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Source: CNN