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Recession: almost all consumer items collapse and specialists compare the brake with 2002 - infobae
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Recesión: se derrumban casi todos los rubros de consumo y especialistas comparan el freno con 2002
El consumo es uno de los indicadores que muestran signo negativo en los primeros meses del 2024 y crece la preocupación en la industria
www.infobae.com
March 13, 2024
Shopping sales plummeted 35.1% in December, according to Indec (Erica Canepa/Bloomberg)
With inflation of 13.2% in February, the recession would have a magnitude similar to the 2002 level and is hitting consumption hard. According to specialists, practically all sectors are seeing their numbers plummet, from food and basic necessities to appliances, motorcycles and other small capital investments. The brake, they say, recalls the decline in activity that was seen in 2002 after the exit from convertibility.
According to data from Guillermo Olivetto , director of Consultora W, sales of household appliances fell by 50%; cinemas, 40%, motorcycles, 20%; and construction supplies, 30 percent .
“For a very good part of society, prices were very far from their possibilities,” said the specialist in dialogue with Radio Miter and affirmed that the recession is of the magnitude of 2002, the year in which the GDP had fallen 10.9% and economic activity, 11.1%
Billing grows due to inflation, but with lower disposable income, the increase in spending hides lower consumption
SME retail sales fell 28.5% year-on-year in January and 25.5% in February, according to the Argentine Confederation of Medium Enterprises (CAME) . Shopping sales plummeted 35.1% in December (Indec) and car registration fell 33.5% in the first month of 2024 (ADEFA).
Along the same lines, according to Focus Market, mass consumption in February showed a decline of 13.4% year-on-year and 6.6% compared to January.
“The loss of purchasing power of Argentines' income continues to be the order of the day . Although in February the prices of mass consumption goods rise to a level lower than what they had been registering in the previous month, they are still well above the possibilities of access by Argentines. Among the most punished categories are cleaning and personal care items,” said Damián Di Pace , director of Focus Market Consulting.
In this framework, according to Nextbyn, changes in behavior and new measures were observed by consumers in pursuit of savings on food, beverage, cleaning and personal hygiene products:
- Consumption of top brands decreases : top brand items are replaced with cheaper ones. This is evident in the data on the decrease in consumption of first brand soft drinks and the growth of second brand soft drinks.
- Product substitution : consumer substitution of high-priced products with other lower-value alternatives. For example, beef is replaced with chicken. A high stagnation is observed in the consumption of frozen foods, cookies and sweets.
- Price search : Lita de Lazzari's “walk and look for price” returns. Purchases are not made in one place, but rather the best prices from each store are sought.
- Consumption due to promotions and not by necessity: The consumer consciously looks for promotions to preferably buy those products.
- Small purchases : large monthly purchases decrease and small daily purchases in local businesses increase.
The slowdown in the economy is felt in sales
The Argentine Industrial Union (UIA) , in a survey of more than 700 companies published last week, noted: “The lowest levels of the series were recorded in the production and sales variables, indicating a worsening of the difficulties in the productive network. industrial, especially in SMEs. This situation resulted in more companies having difficulties in making payments.”
Faced with these indicators, the entity said this Tuesday in a statement: “The sectoral and regional representatives analyzed the industrial dynamics during the first two months of 2024. The fall of the domestic market and the impact of cost growth were some of the topics raised. The need to develop new industrial policy instruments (financing lines, tax and labor measures, among others) was highlighted, along with actions to cushion the impact on SMEs and regional economies in the face of a recessionary scenario. The importance of generating a prompt recovery in the level of activity was highlighted to achieve fiscal, monetary and exchange goals while sustaining the level of employment and production.”
From LCG they stated: “Local consumption resentful of the adjustment evidenced by income imposes a brake on expansion decisions even when the lowering of costs in goods and services not tradable in (official) dollars is still significant.”
