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Street commerce experiences historic decline: sales plummet 27%, large chains close hundreds of stores, and R$5 billion e-commerce dominates Brazilian consumption
For decades, shopping streets were and street shops were the economic heart of Brazilian cities.
They were busy places, full of shop windows and customers walking between shops and cafes. Today, the scenario has changed drastically.
Silence has replaced the hubbub. Where there were once lines, now there are signs saying “for rent” where there were street shops.
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Street commerce is experiencing a profound downturn, while e-commerce is reaching historic highs and redefining purchasing behavior in Brazil and around the world.
The turnaround began with the pandemic
Since the pandemic, footfall in physical stores has plummeted and never returned to its previous level.
According to a report by E-Commerce Brazil / ABComm, Brazilian e-commerce made money $ 204,3 billion in 2024
Consumer decisions have also changed: more and more Brazilians believe that prices are better online. In seconds, a purchase is made via cell phone, without the customer having to cross the street.
This change represents more than a trend. Street commerce, which was once the center of saving urban, continually loses space to digital platforms.
The difference between buying in a physical store and in an online marketplace is no longer subtle—it's become glaring.
Price: the structural advantage of online
A survey of the Forbes Brazil pointed out that 58 % of consumers believe that buying online offers lower prices than in physical stores.
Furthermore, several other surveys indicate an increase in preference for the online channel due to perceptions of better price + greater convenience.
The reason lies in the cost structure. Physical retailers pay rent, electricity, security, inventory, storefronts, and employees, in addition to facing a heavy tax burden.
Digital sellers can operate from home, with reduced inventory and logistical integration.
Platforms like Mercado Livre, Magalu, Amazon, Americanas, and Shopee bring together thousands of sellers competing against each other—which drives prices down to a level impossible to replicate on the street.
Free shipping and speed have changed the game
Price isn't the only reason for digital migration. More than half of Brazilians (56%) say free shipping is the main factor in choosing an online store.
Services like Amazon Prime and Mercado Pontos have transformed delivery into a loyalty strategy, eliminating the former advantage of street commerce—picking up the product immediately.
Additionally, wait times have dropped dramatically.
If buying online used to mean waiting days, today delivery within 24 hours or even on the same day is a reality in large cities.
For almost 30% of consumers, this agility weighs as much as the price.
Travel, parking and queues, common in physical stores, began to be seen as a waste of time.
The power of reviews and price comparison
Another decisive factor was transparency. In a physical store, customers rely on the salesperson's word. In the digital environment, they have access to thousands of reviews and comments from other buyers.
Seven out of ten Brazilians say reviews influence their decisions. This "collective wisdom" replaces conversations at the counter.
The ease of comparing prices also shapes new behavior. Almost half of consumers highlight this factor as essential.
Today, before entering a physical store, many people already search for the average price of the product on their cell phones.
This puts the street vendor at a constant disadvantage — his price is no longer the price on the label but the price quoted by the online search engine.
Digital promotions, personalized coupons, cashback, and flash sales complete the cycle. Consumers, accustomed to dynamic discounts, are increasingly reluctant to pay the fixed price of a physical store.
A change that is also generational
Street commerce is not only losing customers, but entire generations.
A report from the 2024 webshoppers stated that 56% of consumers between 16 and 27 years old prefer to shop online rather than in physical stores.
In a study on the consumption habits of elderly people in Brazil, it was found that around 49% of consumers aged 60+ cite insecurity when entering bank details as a reason for not buying online. Because of this, they still prefer physical stores.
Older people value trust and direct contact: they want to see, touch, and negotiate before closing a deal. Many cite the immediacy of receiving the product right away as a differentiator.
Young people, on the other hand, prioritize convenience. For them, the physical store is merely a pickup point—not a shopping destination.
Three out of four Gen Z consumers use more than one digital channel before completing a purchase.
They research, compare, watch videos, and read reviews before making a decision. Browsing stores, once a leisure activity, has been replaced by social media and digital entertainment.
Streets that age with their customers
This generational contrast is reflected in urban spaces. Streets that were once commercial hubs have seen their customers age along with the shopkeepers.
The result is closures, unrealized rents, and changing profiles. In traditional neighborhoods, family-owned stores still survive, supported by older customers.
In areas with a greater presence of young people, bars, gyms and clinics appear — services that require physical presence.
Even older consumers who have tried e-commerce recognize its advantages. Many maintain the habit of shopping on the street more out of habit than necessity.
Physical commerce survives, but not because of competitiveness — but because it is tied to declining behavior.
The crisis in numbers
The data confirms the collapse. Traffic in physical stores in Brazil fell 3,9% in 2024 compared to the previous year. The data, from Retail Consumer Index (ICV).
Millions of consumers who switched to digital during the pandemic never returned.
The impact is clear: shuttered storefronts and for-rent signs are multiplying in downtown areas. Large chains are also feeling the impact.
Um report Recent data indicates that several chains in Brazil closed units in 2024: for example, Day Network closed 343 stores; American stores, 159; the Carrefour, 123; the Marisa, 91; and the Bahia Houses, 38 units.
Maintaining a physical store has become cumbersome.
Rising rents, labor costs, complex taxes, and rising operating costs do not adjust at the same speed as sales.
The “apocalypse” of stores is not just Brazilian
The phenomenon is global. In the United States, it became known as Retail Apocalypse.
In 2024 alone, more than 7.300 stores were closed, and projections indicate up to 15 closures by the end of this year. Major chains like Macy's, Walgreens, and Party City have drastically reduced their footprint.
The difference is that, there, the debate is national. In Brazil, the transition is still camouflaged by general retail figures, which blend digital and physical stores and mask the shrinking of street stores.
When the street becomes a service territory
The transformation of cities is already visible. Unoccupied commercial spaces are being occupied by other segments: medical clinics, dental offices, gyms, bars, and beauty salons.
These are businesses based on human contact, which cannot be replaced by the internet.
The shopping street, previously a retail territory, becomes a service territory.
Physical commerce is not only facing a decline in sales, but also a loss of structural relevance. Each store closure reinforces the perception that the model has lost its meaning.
An inevitable change
What's underway is a paradigm shift. Mass in-person commerce is giving way to the dominant digital model.
Physical stores become the exception. The difference between the two worlds is no longer just economic, but also cultural and generational.
Young people don't have the patience for the in-store experience. Older people, who still value it, are in demographic decline. Time, therefore, is running out for street commerce.
The decline of physical stores is no longer a prediction—it's reality. And it foreshadows an even more disruptive future: a world in which technology redefines not only the way we shop, but also the way we work, produce, and live.
Which country are you talking about?
Every change brings good and bad consequences... let's wait and see if this one will bring more bad than good...
Magazine Luiza took the last plane to Dubai, platforms such as Mercado Livre, Amazon, Shope and Magazine Luiza dominate the market.
If large retail stores do not change to this modality, they will be doomed to bankruptcy.