As occurred in previous economic crises, consumers in Argentina are once again re-editing old survival strategies to face high inflationary pressure.
This is how, among the resources to stretch the family budget,
the reduction of the “out of pocket” became effective again
.
That is, the need to reduce out-of-pocket expenses as much as possible,
basically adapting the purchase to the money available.
“Now,
people don't order products by weight but by units,”
says the owner of a neighborhood greengrocer in Villa Crespo.
“Customers buy what they need every day because with prices so high, no one can afford to throw anything away,” says the merchant as he weighs three peaches on the scale.
This is a logic well trained by local buyers, taking into account the various economic crises that the country went through.
This year, the December devaluation and the total liberalization of prices among other factors,
found people with very deteriorated salaries,
which are always adjusted behind inflation.
In 2023, the increase in prices reached 211.4% year-on-year while salaries, until November, appreciated 142.7%, according to official data.
And with inflation of 25.5% in December and 20.6% in January, the situation became more critical.
This loss of purchasing power, which encompasses all social segments,
once again fueled the deployment of new resources in front of the shelves
.
Especially because the situation due to increases in food compete with others such as schools, prepaid, electricity and gas and fuel services, among others.
The first observation that consumer analysts make - as a result of the deterioration of purchasing power - is
the greater frequency with which purchases are made, in which, in addition, fewer products are purchased.
“To a large extent, supply purchases belong to the past, since the economic situation does not allow high levels of planning as before and
the monthly purchase begins to disappear
even at higher socioeconomic levels,” reflects Juana Merlo, owner of the consulting firm ShopApp. .
In one of the latest works of the consulting firm, it was detected that “only 50% of consumers know how they are going to move within the point of sale (supermarket, warehouse or self-service) and they
try not to be tempted.
The traditional “shopping list” is no longer implemented and in addition, the purchase is smaller as well,” adds the analyst.
A recent study by Moiguer Strategy Consulting summarized a handful of habit changes that
the middle class is applying in the face of economic restrictions:
the move towards private labels or second brands;
lower meat consumption (a decision that today covers 50% of households);
gastronomic outings, the withdrawal of streaming platforms and even the reduced use of cars or motorcycles due to increases in fuel prices.
Also going out to “have a coffee” were cut back by a third of the middle class.
According to ShopApp, “
price is a driver of change in three out of 10 cases
and occurs mainly at higher socioeconomic levels.
Regarding “innovation, it is men who are a little more encouraged,” the study highlights.
All these changes in habits are part of a situation of
generalized drop in consumption
that has been noticeable since January.
In this regard, Javier Gonzalez, an analyst at Nielsen IQ, points out: “what we are seeing is a general drop in consumption driven in principle by some leading brands.”
A no less significant fact is that,
in January, consumption on the Coast fell 15%
compared to the same month last year,” commented the expert.
Some private consulting firms predict that in 2024 consumption will end with a decline of 7%.
Something that would occur within the framework of a drop in the level of activity of 2.8%, as estimated by the IMF.