The consumption gap between the top and bottom of the pyramid widens

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The consumption gap between the top and bottom of the pyramid widens

Shopping center in Nordelta.

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Sunday at six in the afternoon, in an important shopping center in the northern area. Three mega stores together for household appliances, They leverage customers. There are queues to pay. The queues to pick up products and sellers are not enough to satisfy the demands of consumers who continue to enter the businesses. The postcard looks unusual in a country that has it 37.3% of its inhabitants are poor and cannot buy a basic consumer basket with their income. Yet it is real: just like the food court where it is difficult to find a table or the rest of those places where you can buy clothes, perfumes and accessories despite the exorbitant prices.

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The shopping postcard reflects that half of Argentina with a population with the highest incomes that it can Advance purchases to beat the prices. A half that contrasts with that of those families who have to reduce consumption due to the deterioration of their income and who – far from the wave of consumption- it does not cover their basic needs at the end of the month.

The first is the segment of the population that is in a situation of “Consumption of revenge”, as the analyst Guillermo Oliveto defines it: the expression alludes to the fact that after the pandemic, those who have a surplus of income, unable to buy dollars, spend the pesos by buying goods in installments. In as many installments as possible to have the feeling of “beating” inflation that reaches 58% per annum.

This explains the growth in sales of household appliances, motorcycles and cars; the boom in home repairs or exhaustion places for a recital with tickets that cost between $ 8,000 and $ 19,500. Even the tourist boom that occurs every weekend and heralds an excellent season for the winter holidays: «there is a excellent level of reserves in the main tourist points of the country ”, according to sources from the Argentina Chamber of Tourism (CAT).

In the world of mass consumption, for example in supermarkets, it can be seen that “leading brands tend to be chosen by a consumer with greater purchasing power who shows storage behavior. says Martin Estevez, an analyst at consulting firm Nielsen.

“Some instances of this leading brand behavior are sweet filled biscuits, or liquid soap for washing machines, where we see growth in larger sizes or performance or multi-unit packaging. This denotes a consumer with purchasing power and in a certain sense also strategic since that purchase advance allows you to better hedge against inflation “

“Restrictions in the medium-high socio-economic sectors undergo an adjustment of their expenses in health, education, social, sporting or automotive services”Adds analyst Damian Di Pace. “That is, in the face of inflation they have cut an important part of what historically entailed a standard of equity in their quality of life,” he says.

Instead, the layers found in at the base of the social pyramid which includes the lower class and the upper or “not poor” lower class, nor do they dream of accessing these goods and services. According to the Permanent Survey of Families only one in ten employees earn more than $ 100,000 which is exactly how much the basic basket costs for a typical family, according to official May records. Wages that, in the best of cases, are adjusted for parity with agreements between 45 and 60% per annum in installments, while the expected inflation is 70%.

Therefore, this part of the population continues to see how its purchasing power deteriorates. It is estimated that in this range the loss of purchasing power exceeds 36% compared to the end of 2015.

“People have no money and are buying fewer and fewer units”, underlines Yolanda Durán, of the chamber that brings together Chinese self-services (CEDEAPSA). In this channel is right where theLow-income consumers will purchase the essentials, which fit the amount available in their pocket at that time.

Also Illegal street sales – where the lower middle classes tend to buy more affordable clothes – increased by 34.5% in one yearaccording to the latest survey by the Chamber of Commerce (CAC).

This was demonstrated by a report presented by the Catholic University (UCA) last week four out of 10 Argentines are poor from both income and elementary deprivation, and, among these, one in 10 experiences hunger on a daily basis. Furthermore, according to the same study that examined the problems of the labor market, for over a decade only 4 out of 10 workers have had a decent job, while 60% of the active population has a precarious job, a homeless job or unemployed.

During the presentation of the work, Monsignor Gustavo Carrara, vice president of Cáritas Argentina, recalled that in the country there are 5687 villas or popular neighborhoods. Thousands of families with very limited access to basic services. “Here lies the hard core of poverty. In recent years the gap has widened and the number of poor and destitute has increased. This is the real gap in Argentina, and it cannot continue to happen. Our country will not be happy if that gap is not bridged ”. the prelate stressed.

Source: Clarin

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