The arrival of Fair Prices to the shelves of Chinese supermarkets is seen to some extent as an incentive for this sector that has been suffering closures and reconversion attempts due to the progressive loss of customers. However, the official program, which began to govern these businesses on June 1, starts with a limited scope in the face of the onslaught of inflation and competition from other "neighborhood" formats in which the large chains have been venturing.
As a result of this "combo" of adversities, in the first quarter of the year, the Chinese self-service chamber CEDEAPSA counted the closure of about 200 shops, of which a percentage of merchants managed to "reinvent themselves", moving to other places, and others definitively lowered the blinds and joined other businesses in the field as employees.
"In the last two years it was clearly the hardest hit channel," said Javier González, an analyst at Nielsen IQ. It refers to all existing self-services in the country, of which approximately 60% are Asian. "They had no recovery after the pandemic. Not only in consumption, but also in quantity of business. Compared to those who were in 2019, there are 5% less, "he says. Currently, there are about 20,000 points of sale.
They closed 200 Chinese supermarkets in the first quarter of the year.
"Many could not stand the rents and the increase in fixed costs and had to close permanently. Others resettled in other provinces," says Yolanda Durán, head of CEDEAPSA. The directive refers to cities located in bordering areas such as Oran, in Salta; Puerto Iguazú or Mendoza, where shops receive buyers from neighboring countries, seduced by low Argentine prices.
"This week, a merchant who settled after the pandemic in the city of Mendoza put two pallets with packages of sugar (about 2000 kilos) and sold everything in less than an hour," says Durán as an example of the volume demanded by Chilean buyers.
"They raze the gondolas: they take cotton, wipes, cans of tomatoes, sugar, wines," he lists. "Because the price difference is very big," he says. On the one hand, it is good news because sales increase, but also the merchant loses when he has to replace the merchandise in this context of so much inflation, "he says.
Chilean shopping tour of Mendoza marketsPhoto: Orlando Pelichotti/ Los Andes
Meanwhile, the Chinese shops that remain open in the Federal Capital and Greater Buenos Aires, barely "subsist" according to Durán. The great competition they have with the wholesalers who opened new proximity mouths and the "neighborhood" formats, of chains such as Carrefour and Dia, reduced the competitiveness of Asian supermarkets.
Another ingredient that made them lose a lot of sales is the price differential: on average they outperform the chains by 35%, according to the Nielsen IQ consultancy.
The consultancy Ecolatina, based on the data collected by Tomadato, detected that between January and May of this year, among 19 items, only five had increased less in self-services than in large chains. On the other hand, rice, for example, increased in that period by 20.6% in supermarkets and 57.6% in supermarkets; milk rose 29.8% vs 38.5%; sugar, 23.2% vs 49.7% and coffee, 31.1% vs 37.5%.
González, from Nielsen IQ, reaffirms that the main driver in the loss of self-services is the positioning of prices, respect for other channels. In this sense, "self-services came very close to store prices. And in this context, in which the number of items per purchase is shrinking, today the buyer goes more to the warehouse because in some categories it is cheaper than self-service and also buys what is necessary, as a method of saving. "
According to the analyst, all categories registered a drop in this channel, although the impact is a little milder in alcoholic and non-alcoholic beverages.
In the last year, considering the data available until April, the average fall of 0.5% of mass consumption in the country had its explanation in a drop of 8.2% in the self-service sector, (much deeper in the AMBA than in the Interior of the country) and a rise of 8.6% in the large supermarket chains. according to the consulting firm Scentia.
"Before, at the end of the day, you could see queues at the cash registers of our shops," Durán says. "Now there is no more. People come to buy the most basic products to feed themselves and only earn to survive, "he describes. And faced with the expectation for the incorporation of Fair Prices to the Asian shelves, he says: "hopefully the program will help drive sales because it helps us a lot to have reference prices," he says.