The large supermarket chains are recovering market shares compared to self-services, favored by the Pricing Right program and partly, surprisingly, by the exchange rate differential. In 2022, sales of mass products (food, beverages, toiletries and cleaning) grew by 4.6% “pushed from within the country”says a report prepared by Nielsen. The key figure, adds the consultant, is the notorious increase in demand in border cities by Uruguayans, Paraguayans and Brazilianswho arrive in the country attracted by the difference in price compared to the countries of origin.
Nielsen measured the evolution of sales in 5 neighboring municipalities and in everything the percentage found increases well above the national average: in the branches of Clorinda, Formosa (33%); the missionaries Iguazú (120%) and Posadas (16%); Concordia (13%) and Gualeguaychú (27%), both from Entre Ríos. “The price difference has existed since there was a gap. The novelty now is that after the pandemic deepened with rising inflation in many countries in the regionwhich has produced a general increase in prices”, explains Javier González, expert at Nielsen.
The report does not cover other “hot” border crossings in Argentina, but González clarifies that the sample “It’s a reflection of what’s happening”. Unlike other times, foreign visitors don’t come to buy hard goods, clothing, footwear or the classic leather jacket. “They target basic consumer products, such as oil, flour, wine, detergent or fabric softener, meat and milk.“, they explained to clarion from a leading chain.
Buyers, in some cases, are perfectly differentiated. There are those who take advantage of being close to do the family shopping (final consumers) e small traders which are provided in an Argentina that seems gifted. Also, both never forget to fill up the tank of cars and vans due to the local “low” fuel value. It is opportunistic consumption.
Gonzalez points this out the average price differential ranges from 30 to 41%depending on the product, the type of purchase and the format of the branch. The gap is much greater with the products that make up the Fair Prices program, installed to fight inflation. Large supermarkets, wholesalers and regional chains coexist at border points, all benefiting from ‘foreign consumption’.
Purchases, in general, individually are not extremely voluminous. But the behaviors are well studied. “The Paraguayan customer generally buys in quantity (goes directly to the wholesaler) e pay cash. The Brazilian focuses more on high-end products (premium wines, packaged cuts of meat, alcoholic and distilled beverages and diapers) and pay with credit card“Described Diego Sabat, manager of Libertad.
This chain, which belongs to the French Casino group, has 34 branches. A Posadas has a hypermarket and a wholesale store, which receives people from Encarnación (Paraguay) and also from Ciudad del Este (Brazil) daily. “In all cases, the flagship product is fuel“, Sabat points out. “In the wholesaler, Paraguayan customers represent between 30 and 40% of total sales. The most demanded is sunflower oil and flour, which in the countries of origin they cost between 2 and 3 times more“, he explained.
They say that foreign customers have perfectly recognizable profiles. “Generally, they line up half an hour before the store opens and stock up on a monkey or two“, which they pay after selling dollars at the price of blue. Brazilians, on the other hand, go directly to the hypermarket because “they already know what they are going to buy and They don’t even look at the price: they discount that they are cheaper than in their country“, Saturday chart.
The Posadas branches are among the best-selling within the chain. In the supermarkets, without going any further, they recall that the former Undersecretary of Commerce Roberto Feletti expressed his anger at the price regulation on more than one occasion (alluding to Precios Cuidados). “It is a state effort aimed at domestic procurement”.
With nuances, similar things happen on almost every border. “In Concordia and Gualeguaychú, Uruguayans buy everything, especially fresh produce. They arrive with suitcases and unpack the sheets, for example, which they leave hanging in the parking lot,” another chain explains. It’s not a biased comment. Many Argentines do something similar when traveling to Miami in times of change delays. The coin has been flipped.
“What is observed in the Posadas are organized buying groups. The tasks are divided to visit supermarkets, wholesalers and shops to compare prices. Then notify and coordinate to avoid any limits on quantities. Up to 20 cars entered together to take as much as possible,” explained an industry executive. In that mission city, “the best sellers are sodas (it’s a more recent thing), oil, flour, cleaning and toiletry products from brands like Skip, Magistral, Cif, Rexona and Axe.”
As for Clorinda (a neighbor from Paraguay), she says the influx of the public is much greater. “There is a presence of small traders, mostly to buy drinks, but many families also come to do their usual shopping. Most pay in cash. We have days when 80% of sales were paid in cash,” concluded the executive.
Source: Clarin
