The accelerated loss of weight value as a result of the inflationary escalation is accentuating some consumption habits. While the lower classes juggle their muscles to buy the basic products for a living, the middle and upper classes who manage to end each month with a fewn surplus in their income, He uses it for more immediate gratification or anticipates consumption as a means of saving.
In this regard, Mariela Mociulsky, director of the consultancy firm Trendcity explains: “Once the pandemic crisis has passed, which has left a large part of the productive activities in brackets, the Argentine middle class today try to mitigate the impact of this race against time to stay on the waterline”he says, alluding to the impact of unchecked price increases.
In this sense, the latest official measurement showed a monthly increase of 8.4% – in April – which brings the inter-year variation of inflation to 108.8%. A speed that wages clearly do not carry. Furthermore, if the average of general inflation is intimidating, even more so when one considers that half of the items that make up the price index (CPI) accumulate go above that level.
So, at the rate of this urgency of the population to assert their own income in pesosbegins to emerge consumption as savings. For example, from buying shares in the supermarket to acquiring cultural assets. This is a shortcut that capitalizes the massive shows whose ticket sales sell out in less than 24 hours.
“It is that if money loses value minute by minute, a ticket purchased in March for a concert that will arrive in November is a clear example of the consumption as savings”, says the analyst. The clearest example is the sales record broken by British band Coldplay when they sold out 10 dates for their November show at the River Plate stadium in June last year. Was it fandom for Chris Martin or desperation to make money work?”
Among the studies carried out by Trendsity on consumer expectations, it emerges that This phenomenon emerges from the inflationary scenario: 43% of the interviewees declared it “With what I have left over a month, I take advantage of it to give myself a personal taste.” The results confirm this trend which originates in the difficulty of buying durable goods or accessing credit.
So another peculiarity arises: the impulse, the compulsion to live ephemeral experiences, whose temporality compensates for a certain frustration. The overseas travel dilemma, barriers to long-term planning or suspended until further notice programs mean that large numbers of young people, for example, prefer to travel and ‘gain experience’ rather than try to access a loan to a first home.
In another of the consultant’s studies prepared on a basis of 1000 cases, it was established that 8 out of 10 Argentines believe their economy will not improve in 2023. Among the new habits emerge small purchases, the multiplicity of channels, proximity shops. 71% say they shop in more places, while 62% have stopped buying products to keep.
According to a regional KPMG study, there are three main vectors that are changing consumer behavior: 1) the inflationary scenario, 2) adherence to the defense of sustainability and social responsibility, and 3) the dynamics of combinations (virtual and physical shops, return to the office and home office).
Despite economic adversity, according to this report, people are increasingly careful when it comes to comparing but, despite this, continue to consume. They avoid expensive purchases and choose to spend more on essentials, experiences and services.
According to Eugenio Orco, leading partner of the Consumer and Retail Industry of KPMG Argentina, “the results of the survey are regional trends that also are being tested in Argentina. The economic crisis has made consumers more conservative, but at the same time more demanding and selective because they have access to more information on products and services, and for this they make more rational decisions, taking great care of their wallets”.
“The middle class, specialists in juggling, do their best so that none of their values fall to the ground. Tossing one or the other in the air while consolidating what, although it represents an effort, he doesn’t want to lose, Mociulsky finally reflects. “Dexterity, reflexes and resilience: the formula for maintaining that delicate and fragile balance,” he says.
Source: Clarin
