the header restaurants and hotels They were, together with apparel and footwear, the ones that drove the increases in the consumer price index (CPI) over the past year, with increases of 108.8% and 120.8% respectively. That is above the general level of inflation which closed at 94.8%.
The second place on the podium for the increases, in the case of gastronomy, meant that the entrepreneurs of the sector considered themselves, at least, “pointed out” as responsible for these increases. For this reason, and as part of the government’s presentation of a new version of the Fair Prices plan this Friday, they went to deny that the sector is a generator of inflation: they ensure that the official data reflect “a partial view” of the problem and that “it is necessary to look at the overall picture” to analyze which sectors are really driving inflation.
Through a report by the economic consultancy firm Invecq, the representatives of the sector explained, first of all, that “the relative price of the premises accompanies the increase in prices in general and that the increases of the last two years are due to the historic crisis they face, after the closure of more than six thousand businesses during the pandemic”.
Analyzing the price evolution of the various mass consumption sectors in December 2022 “reflects that the relative price of the “restaurants and hotels” item is 3% higher than the December 2016 level, i.e. it moved in line with the average of the economy over the past six years,” notes the report.
On the other hand, employers argue the activity is based on food which has undergone significant increases in the last moment. “The relative price of ‘food and drink’ has been consistently higher than that of ‘hotels and restaurants’ since June 2018,” the study points out. This was stated by María Sance, entrepreneur of the Mendoza wine industry the profitability of his business went from 23% in 2019 to the current 3%. And he says that with the pandemic he has worked “at a total loss”.
“With the reopening of the premises, the scenario improved, but the dramatic situation in the sector lasted for a long time because there were very few movements due to the restrictive measures taken by the national government and the fear of eating out or staying in a hotel”, he underlined.
“The expenses that were generated could not be transferred to the prices because the restaurants remained practically empty. AS, The 2020 and 2021 rates were subsistencethey didn’t break even: they only paid for wages and basic services,” explains Fernando Barbera, owner of the Italian restaurant La Marchigiana.
“What happened next was “a rearrangement of prices due to the delay they have had due to the pandemic”, completed Salta’s gastronomic leader Juan Chibán. Another key factor that directly affects the cost structure is cost increases public services, which in the last year have been higher than the increases applied by entrepreneurs in the premises, according to Invecq.
According to the consultant, the reorganization of relative prices in the sector is due to “a market with fewer players due to the closure of thousands of companies in the sector during the strict quarantine, a transitory phenomenon that will settle as the companies left out return to the market and the sector’s offer returns to normal levels”, he estimated.
The industry’s move to explain the price increases comes against a backdrop of increased government pressure on businesses to limit increases. For example, Economy Minister Sergio Massa launched it on Friday an expanded version of the Fair Prices programme which includes a cap on tuition increases for private schools. The plan envisages nearly 50,000 products that from February 1 to June 30 will increase by only 3.2% per month; and 2,000 products that will continue to have a fixed price.
Source: Clarin
