When looking at what happened to consumption in the past year, specialists distinguish between two phases. A first semester with a good volume of sales and a significant slowdown in the second, due to the volatility of the dollar, the escalation of inflation, the increase in the cost of credit and the decline in personal income.
Guillermo Oliveto, director of the consultancy firm W, interprets that “this year would look more like the second half of 2022 than the firstwhere the restriction of purchasing power in many families has begun to limit the increase in the propensity to consume which brought about the end of the pandemic”.
A W studio exclusively prepared for clarion note that most sectors recorded increases last year. Mass consumption (2%), household appliances (15%), real estate in CABA (14%), pharmacies (5.5%), building materials (6%), cars (6.8%), motorcycles (7% ), shopping centers (40%), hotels and restaurants (40%) and tourists abroad (303%). The only item in decline is clothing (-10%), while beef consumption has remained stagnant.
However, some numbers should be compared with previous years. In 2022, 33,000 operations were carried out in the capital, against 64,000 in 2017. The same happens with cars (407,500 in 2022 and almost 900,000 in 2017) and tourists who have traveled abroad (2.1 million against 3.7 million). There are sectors, such as shopping malls, cinemas and tourism, which have recovered what they lost during the pandemic. Instead of growing, they rebounded.
Mass consumption in general slows down. According to W, sales of food, beverage, toiletries and cleaning supplies increased 6.9% in January, and the first half accumulated an average increase of 4.4%. July was 2%, August was 1.1%, September was down 0.8% and October another 4.5%. Mass consumption spent 10 years between stagnation and fall. “In this context, it is difficult to predict large increases or large falls today, unless there is a sudden devaluation”, says Oliveto.
“Consumption prospects for 2023 look worrying,” summarizes economist Ricardo Delgado, of Analytica, due to high inflation (close to 95% in 2022), rising rates and falling income for the population . “Measured in dollars, the formal salary has decreased by 65% since 2017”, recalls Oliveto. 5 years ago it represented US$1,702 blue. Today it is around US$520. Informal workers fared even worse.
Analytica analyzed the relationship between prices and wages in 12 commodities. For example, on an average formal salary, you could buy 492 kilos of French bread in November 2021. In the same month last year, it was enough for 455 kilos. The same is true for flour (1,694 vs. 1,319), dry pasta (1,307, 1,007), chicken (462, 435), milk (1,124, 883), onion (1,742, 567), and potatoes (1,881, 898). Only 4 categories have improved: rice, round tomato, yerba and white rice.
Maximiliano Narducci, of the Nielsen consultancy, says mass product sales have fallen sharply since July, following the resignation of Martín Guzmán. “Then there was a recovery, especially in the big chains. But Chinese supermarkets close the year with a drop of 9.3%”to describe.
The housing market rebounded in 2022 after a long period of paralysis. However, “historically, it hasn’t been a good year. The number of write-ins is still lower than 2019, which was its worst ever”, observes Fabián Achával, economist and director of the real estate company of the same name. In any case, Achával points out that “this is a level compatible with stocks and the crisis” and predicts that “We will continue like this for a long time.”
Germán Gómez Picasso, of Real Estate Report, agrees with the analysis, even if he clarifies that in the hinterland and in the province of Buenos Aires the situation is better than in the capital. He also explains that this greater movement is mainly due to the fact that “prices have dropped 40% in the last 4 years”. As for construction, the expert says that “despite the crisis, it’s moving quite well” in terms of home renovation and expansion.
Durable goods (cars, household appliances and motorcycles) recorded gains in a context of import difficulties and an increase in the cost of consumer finance. In 2022, 407,532 zero kilometer vehicles were shipped, an increase of 6.8% over the previous year. Dealers believe 100,000 more units could have been sold if inventories had been eased.
The motorcycle market has seen a rebound in sales, even if it faces the same difficulties as the rest of durable goods: inflation and lack of dollars. Nearly 411,000 units were patented last year, which represents a 7.1% increase over 2021 (383,767 units). In the sector they point out that the demand has been increasing until the first half of the year and that the trend has changed since July.
The tech industry prepares for 2023 with equal or worse difficulties. Companies in the sector expect sales drops of between 10 and 15% in units for this year. Data on production and consumption of Afarte indicate that in 2022 Nearly 3.3 million televisions were assembled for the World Cup and only 2,540,000 were soldwell below the projections taken into consideration.
The spent recipe of the quotas
Payment plans used to be a favorite promotional tool for both companies and the government. Especially in election years, for the close relationship that exists between consumption and the social mood of Argentines. However, last year, due to the increase in interest rates, credit to the private sector contracted by 14%.
In a year-on-year comparison, consumer bank loans were the hardest hit: They fell by 16% in real terms, according to financial sector sources. Similarly, almost all official programs, including Now 30, Now 10 and the Mi Moto plan, had very little impact on the total volume of operations. Even if the companies and merchants claim that at least it served to attract interested parties, “who ended up buying in another way”.
An example is the My Moto plan, which allows the purchase of motorcycles in subsidized installments through Banco Nación. From its entry into force at the end of 2020 to the present, only 5,218 units were sold under that plan. This represents just 1% of the total market volume. “The figure is low, but it has attracted the public to the salesrooms,” explains Martín de Gaetani, manager of the La Emilia group (Motomel).
From a bank they trusted clarion that consumer credit has cooled down in recent months. “In December, the number of operations decreased by 10% compared to the same month last year. The new plans (Now 30 and Now 10) do not reach 1% of the total. Almost everything is concentrated in the different options of Ahora 12,” the source explained.
The Now 30 has not yet reached its goal despite efforts by the government and manufacturers of electronics and appliances. The plan made it possible to finance the purchase of TVs, air conditioning, cell phones, washing machines and refrigerators in 30 fixed installments and came into effect on 22 October. The program failed, mostly because the huge amount of commercial waste due to the low stakes that cards have in general.
Subsequently, the government launched Now 10, a plan to purchase mobile phones in 10 fixed installments, with an annual rate of 48%. In return, the electronics manufacturers have promised to keep prices fixed for 90 days, i.e. until March 15th. Instead, they allowed the return of cell phones to Now 12, which have a higher rate.
From an international mobile phone brand, they estimated that Now 10 is slightly more effective than Now 30, but only accounts for 15% of all operations. The percentage drops to 5% with the Now 12 plan. As for the sales projections for this year, most of the companies related to the technology sector expect declines between 10 and 15% in units.
Source: Clarin
