According to data from the consulting firm Scentia, the phenomenon is already transversal to all channels. Confidence in Milei’s management, fundamental for the economic plan, falls according to the Torcuato di Tella University.
Mass consumption fell again during March, according to data from the consulting firm Scentia, which indicates that the negative variation was 7.3% year-on-year in supermarkets. The phenomenon is now transversal to all channels: Wholesalers, self-service stores and even pharmacies also collapse. As a result of the loss of purchasing power, sales do not find a floor and hit a key pillar for the economic plan: the image of President Javier Milei. The confidence index in the Government fell 4.4% as measured by the Torcuato di Tella University.
Representatives of the big chains are worried. There is no offer, promotion or freeze that can attract customers. “There is no money,” the mantra repeated by the President, was de facto transferred to consumers who cut back on products that a priori should have a certain inelasticity in demand: food, beverages, hygiene and cleaning items.
The latest survey by the consulting firm Scentia describes a dramatic scenario for the retail sector. Sales in supermarkets plummeted by 7.3% year-on-year, in wholesale outlets by 10% and in pharmacy chains by 20.2%.. None of this was offset by independent supermarkets, which in the same period also recorded a drop, in this case of 7.6%.
According to the theory of the Minister of Economy, Luis Caputo, people are not validating the high prices set by businessmen. But the drop is transversal to all channels and also to each of the items. All categories of mass consumption show decreases: food 2.2%, alcoholic beverages 13.1%, hygiene and cosmetics 11.2%, cleaning and household linen -6.1%.
These are not luxury goods or postponeable purchases, which reflects the process of loss of purchasing power that has worsened since December. The drop in an essential product for families such as milk was 20% in the first quarter. It doesn’t taste like a boycott.
Confidence that begins to give way
The mood of society holds for now. The question is until when. With an administration with little parliamentary force and no presence in the district governments, the vice president of the Central BankVladimir Wening, considered social support as a central pillar for the sustainability of the economic plan.
The presentation made by number two Santiago Bausili in Washington celebrated the support of society: “After 4 months of government, confidence in Milei’s management remains high, as usually happens after an election.”says the text that was presented to investors.
But in the last hours The Torcuato di Tella University published the monthly evolution of the Government Trust Index (ICG), which showed a drop of 4.4% in April. According to the survey, current trust is 9.9% lower than the measurement in April 2016 at the beginning of Mauricio Macri’s mandate and is 25.4% below that of April 2020 with Alberto Fernández.
According to the report of the School of Government of the University of Tella, the variation of the ICG was negative in four of its five components: general evaluation of the government, concern for the general interest, efficiency in the administration of public spending, ability to solve problems. He only showed an uptick in consideration of the “honesty of officials.”
The honeymoon begins to run out at the rate of falling income and employment. The same survey shows that economic prospects worsened among those surveyed. The group of people who believe that the economic situation will improve within a year fell 2%, as did those who believe it will remain the same. What increased by 5% is the portion of pessimists, who believe it will get worse.
Source: Ambito
