Pesos burn and prices fly: the two faces of consumption

Two photos of the crisis illustrating the current state of consumption. 75% of Argentines said that “in the last month they have had to significantly cut their expenses compared to their usual budget”. But at the same time, sales in shopping malls (35%), hotels and restaurants (35%), motorcycles (10%), building supplies (15%), clothing and pharmacies (10) are growing. %) and in mass consumption (4.5%).

They are contradictory data. As if they came from two different countries. However, specialists believe that everything is part of rational logic in a scenario where economic variables converge (wave of recompositions, escalation of the blue dollar) and also social ones (exit from the pandemic and deferred expenses). “% E2% 80% 9D,% 20 summarizes% 20 the% 20 consultant% 20 Fernando% 20 Moiguer,% 20 albeit% 20 clears% 20 that% 20% 20 more% C3% ADa% 20 perceives% 20 that% 20 to% 20pa% C3% ADs% 20 (the % 20macro)% 20le% 20goes% 20bad,% 20but% 20% E2% 80% 9Cnot% 20both% 20a% 20level% 20personal% E2% 80% 9D% 20 (the% 20micro).

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This double vision of the economy in general (“everything is wrong”) and of the micro (“I have pesos and I can’t keep them”) runs through almost all sectors and businesses in the country. The blue jump and import barriers have a total impact on the sale of cars and also of electronics and appliances. A producer from Tierra del Fuego comments that for now they continue to deliver goods, but that they analyze by making a price adjustment the requirement to be funded for 180 days in dollars.

“With the shock of the dollar and the decline in the supply of allowances, sales have cooled. Although it is not yet clear whether this is due to the crisis or whether it is due to the start of the winter holidays ”, plays Pablo Cetrolo, owner of the Cetrogar chain. The businessman really argues that people avoid holding pesos due to impairment, but adds that what prevails today “is prudence and customers are very rational in their purchases. That’s why there is less traffic on the premises, ”he complained.

Oliveto believes that consumption conditions will worsen in the second half of the year. “Up until the first half of the year, formal wages followed inflation closely. It is now calculated for the year 90% or more, so the question is who can make that leap, “he said. The expert says it is very likely that there will be a” large loss of purchasing power. ” impact has to do with the social sector. “Upstairs there is a desire to consume. Underneath is desire and a lot of frustration“, ended.

Logical reactions in the post-pandemic

Uncertainty regarding the dollar level deepened last week. The new leap of blue, coupled with the tightening of import restrictions on inputs or components, has accelerated price markings in almost all items. In the last two weeks, supermarkets, shops and kiosks lists received in increments of up to 35% and limits have been set on the delivery of some products, such as oil, sugar and toilet paper.

The political and economic quagmire has aggravated a scenario, that of consumption, which had shown good results until the first half of the year, as evidenced by the specialist studies to which it joined. Clarione. One of them, drawn up jointly by consultants W (by Guillermo Oliveto) and Almatrends Lab, reports that in the first half of the year sales increased in shopping centers (35%), hotels and restaurants (35%), and motorcycles ( 10%), building supplies (15%), clothing and pharmacies (10%) and mass consumption (4.5%).

In April, Kantar Insights consulted 500 Argentines from all over the country on the issues that concern them most. Most replied that the social situation and inflation. The curious fact is that 27% said they will focus on spending planning in the near future, while 25% say they will “indulge themselves” (indulgence) to cope with the situation.

For experts, this double standard (adjustment of spending on the one hand and higher consumption on the other) is due to the emotional impact of the pandemic, which has postponed food outings, face-to-face purchases and the use of basic entertainment. . A reflection of this is that Coldplay will offer 10 country recitals at River Stadium, whose seats sold out in record time. The average ticket price wasn’t cheap: $ 12,000.

The other aspect is the impossibility of accessing, at least for the medium and high income sectors, the purchase of goods implanted in the collective imagination as aspirational: homes, cars and trips abroad. All in a context of growing inflation in which the “weights burn”. This is how they reason in the appliance chains: “Although it is not as clear or so defined how sales will evolve, the truth is that people do not have the possibility to save”, says Pablo Cetrolo, manager of Cetrogar.

Durable goods (cars, motorcycles, electronics, for example) are havens of value and comparable, to some extent, to pesos dollars. “People wear helmets, but while they wait for the bombs to fall, they spend it if it has a weight, because perhaps war will never come,” says consultant Fernando Moiguer. However, he clarifies that for the majority of the population “consuming is proving to be a great effort”.

Uncertainty affects the entire social pyramid. 75% of Argentines “in the last month have had to significantly cut their expenses with respect to the usual budget”. This means that 3 out of 4 people have reduced consumption either due to the fall in the purchasing power of their income or because they fear that the economy could worsen their conditions.

Consumption is a key indicator for social humor.