We are witnessing a sudden change in the logic that has dominated consumption in recent years.
Until November 2023, pesos burned in our pockets, saving made no sense and the widespread perspective of the economic model made Middle class incomes will serve to satisfy the pure present. This explains the enormous contradiction of having full bars and restaurants, international concerts sold out in a few hours, and consumption that does not slow down even in an economic context of constant loss of purchasing power.
Today, pesos no longer burn; Today the pesos are not enough. This is represented by the Consumer Confidence Index (UTDT), which has moved from being in place a record in recent years of almost 50 points by the end of 2023, fall to the lowest levels in the last 20 years in just 45 days.
How is this explained?
For the first time in Argentina, and almost in the world, the restriction was voted on. Going through a strong adjustment that would allow us to dismantle a logic that no longer worked to build a new model of country: “sacrificing the pure present chasing the illusion of a different future”.
6 out of 10 Argentines believe that “it is necessary for the new government to take important measures, even if hostile, because the situation in the country cannot go any further”.
And this explains why, once the new government took office, despite a much less favorable context for consumption, expectations for the future were positive, reaching 51% in December (16 points more than the average of positive expectations previous ones).
Now, the majority of society voted for the adjustment, but they did not vote for “how” and This is what will determine whether the gap between the pessimism of the present and the hope of the future will remain.
In principle, the flurry of measures all together and without anesthesia – liberation of prices in supermarkets and fuel, warning of future tariff increases in transport, gas and electricity, low expectation of a correlation in the recomposition of income, and more – makes today the positive future expectation for the next 12 months that we periodically record in the Social Mood study, lose 9 points (going from 51% in December to 42% at the end of January).
Historically, In Argentina, those who most influence social humor are the middle class. And it is precisely this class that, in relative terms, has fewer tools to cope with these measures, because the lower class lives by adjusting itself and the higher class does the rest. In addition to the fact that two more increments are coming on the horizon, fundamental for its cultural basket: the boys’ school and the prepaid.
It is in this scenario that the new logic of consumption begins to emerge. We move from impulsive consumption to rational consumption; from “I spend all I can” to “I spend what I get”. And this represents a phenomenal paradigm shift for brands too. Because consumption stops being an economic anabolic and becomes the adjustment variable, with which companies that until now were almost demand-driven will have to exit to take advantage of supply.
Now, even as society limits as many things as possible, it chooses carefully where and how much to spend. This explains, for example, the boom in the new alfajor launched in Mar del Plata, nachos with guacamole from a local supermarket and popsicles from another chain.
The small daily pleasure is the order of the day, because In a context of pure loss, gratification is much more necessary. Perhaps the first key to the strategy of companies today appears here: providing support not only starting from price and accessibility, but also from the proposal and value.
Source: Clarin
