A recent report from the consulting firm Kantar reveals that almost seven in ten consumers (66%) were forced to change their habits in recent months, as a result of strong inflation and the liquefaction of salaries. Also, since Focus Marketthe consulting firm that runs Damian Di Pacethey observe a 13.5% drop in mass consumption in the accumulated of the first quarter.
As explained by president of the Federation of grocers of the province of Buenos Aires (FABA), Fernando Savorethis occurs in a context in which, “in December, with the inflationary jump, there was a phenomenon of a very strong jump in prices, which generated a lot of speculation.”
The merchandise rose in price, in most cases, doubled the value, and in some, it even quadrupled, just like oil and many other merchandise. Although this trend subsided in the following two months, this jump and subsequent inflationary inertia resulted, in January and February, in a drop in warehouse sales that was between 20% and 22% in that type of business, according to Savore.
Inflation forces Argentines to go for cheaper brands
In this context, there was a series of habit changesamong which, without a doubt, one of the most striking is the replacement of top brands and favorite products with cheaper ones. In fact, 51% of Kantar respondents confessed that they stopped buying their favorite brands in favor of cheaper ones and 52% said they opted for other less expensive categories instead of those they usually consumed.
Savore also points out that, “today, lPeople focus more on day-to-day shopping than bi-weekly or monthly purchases“and details that this has to do with a tendency to count money more day by day than monthly. On the other hand, it illustrates that it is seen that people buy what they can afford and ask how much the products add up as they are purchased. They go through the box.
They leave things in the boxes because there is no money
This is one of the saddest symptoms of changes in consumption, perhaps. “It is common for them to decide to leave something behind, for example, if they see that it is overpriced. In stores, many of us trust people we know, but more and more merchandise is left in the boxthat’s real,” says Savore.
However, they are not the only savings mechanisms that the Argentine consumer resorts to. There is more: “Habit changes have to do with replacement of first brands with second brandsstrong incidence of promotions, discounts and loyalty through credit cards“Details Di Pace. In other words, there is a lot of interest in taking advantage of the promotions offered by points of sale, but also the discounts offered by banks and cards.
Choosing between dressing and eating, a worrying symptom
For his part, Claudio Boada, director of the Union of Users and Consumers, points out that an element to take into account is that Inflation “has repercussions in different ways on different social sectors“. He exemplifies that, in the middle strata, for example, “a reduction in consumption is seen due to having to dedicate more money to other expenses, such as rent, public services and food, which results in sectors, such as clothing , cultural consumption and others are being left aside.
That, he clarifies, “also adds to the search for lesser-known brands for advertising reasonswhich are not necessarily of lower quality, although in some cases that condition does exist.” And he mentions, on the other hand, that the aim is to reduce more fixed consumption. “In fact, many people unsubscribe from some serviceslike cable television, for example,” he says.
What’s coming in consumption and inflation
In this scenario, Savore points out that grocers observe that many prices could begin to drop, especially with regard to the leading brands, precisely because, as stated, people began to buy alternative brands. And, on the other hand, “the increases in March are milder, we notice them mainly in the cheese category.” Thus, he does not rule out that, as has been anticipated by the Government and some private consulting firms, there could be a slowdown in inflation this month.
And another element that could contribute in this sense is that, as Di Pace explains, “now, there is a moment in which the entry of Argentines will begin to have three contextual situations: they will suffer the rise in serviceswhich will occur in March, April and May, on the one hand, although, on the other, a brake on the rise in prices of goods and there will be attempts to recovery of loss of purchasing power that occurred recently in Argentina through parity or pension adjustments.” These elements could mitigate in the current month and in the next, at least, the strong impact on consumption that is seen.
Source: Ambito
