Our measurements indicate that in March and April of this year consumption fell compared to the same months in 2020, something logical because last year it had increased, but in a particular situation," said Osvaldo Del Río, CEO of the consulting firm Scentia, beginning to analyze consumption with graphs that show how when the inflation and salary curves touch, consumption recovers, and falls when inflation takes off to the detriment of the salary. "In the first 5 months of this year, inflation took away from the salary. more than 4% and no matter how much money is injected so that people consume more, we already saw that last year that was done, consumption fell and the year ended -0.1%, tied we could say, but on a terrible basis.”

The basis of comparison with 2020, which Del Río describes as terrible, has a lot to do with the unnatural growth that consumption had in March, with people buying everything before the outbreak of the pandemic and confinement. “The most critical thing about this is that in 2016 we had a fall of 4.5%; in 2017 of 3.2%; in 2018 of 1.5% and when everything suggested a slowdown and that 2019 was already a year without a fall, the opposite happened and it was the worst year of the four of (Mauricio) Macri's management: it fell 7.3%," he said, adding that in April 2021 vs April 2020, chains already recovered 4.2% while independent self-service fell 18.6%, wholesale 9.4% and ecommerce showed a positive 6.9%, already much less explosive than last year.

“The chains gain share in volume because their comparison base is negative compared to this year and self-service stores start from a positive base, hence such a drop, but on the other hand, this distortion of variation in volume is explained by the price,” highlighted Del Río. “In a comparable basket of products, the supermarket was historically between 5% and 7% cheaper than the self-service, but in January of this year that percentage was already 17.6% and reached 27.4% in April.

What is the forecast for this year?
"The estimated end of the year gives us -1% /+1%, closer to the negative side than the positive. It will be very difficult for it not to end similar to last year. Taking a historical series and with 1996 as a base 100, we see that the worst year for mass consumption was neither 2001 nor 2002, but 2003, although in the last 4 months of that year a recovery began that became strong starting in 2004. About that base 100 in 1996, in 2021 we would reach 118, but if you do a simple mathematical account and add a population growth of 29%, it takes you to a position like that of 2003, or worse.

How does all this impact the consumption of durable goods?
“One of the main competitors for household appliances is the dollar,” said Jorge Koremblit. "When people are afraid of a devaluation they buy dollars, and that directly affects the sale of durable goods, in general. Just as in mass we had a very good March 2020 due to a particular situation, in electro people stocked up to stay at home in the most comfortable way and categories that had even lost share were sold. There were many winners, but in a pandemic situation and with a volume that is not recovered."

In this scenario, what analysis can we do of the Hot Sale 2021?
“In November or December, many clients asked us what was going to happen with ecommerce in 2021 and my answer was that it is not going to grow, even though Argentina was the country in which it grew the most in Latin America,” Koremblit continued. "But no country had an 8-month isolation, we have a high Internet penetration and a developed electronic payment modality that together helped this great growth and it is difficult to maintain it with a different situation and without being locked up for 8 months. With a very low level of supply it was difficult for there to be a large Hot Sale, and there was not one. The numbers in billing were large. There we must take into account the devaluation and inflation, but in units it was very similar to last year and in food it was lower. I think that this year the growth of the ecommerce is going to be organic.”

The exit is the income
Scentia data show that measured by individuals, and not by household, in 2018 the income range of up to 40,000 pesos per month represented 64% of the total; In 2019 it reached 70%, in 2020 it reached 77% and this year it reached 79%. “This means that 79% of people earn up to 40,000 pesos per month, but taking an average gives us that they have incomes of less than 30,000 pesos,” Del Río cited. "To bring it to a home you have to multiply it by 1.8, which is the expansion factor, and it gives us that 2.3 members have to contribute income to cover the total basic basket. People who need to buy appliances are going to try to do so, but with this level of income without Now 12 and Now 18 it is unviable. The problem that I am noticing with these programs is that the interests are very high."

It has always been said that in the credit for the purchase of appliances the user does not look at the rate, but rather at his or her ability to pay the amount of the installment. Are we talking about the fact that even if financing plans exist, if rates remain high, access to goods can be complicated?
“We are a poorer country and the numbers indicate that this is going to continue like this,” Koremblit concluded. If mass consumption has been decreasing year after year, what can be expected from durable goods. There is a niche that many manufacturers are looking for in the high-income segments, people who previously traveled or bought abroad and with these restrictions invest in the home, but that has already been done and it is difficult to do it again. No matter how much there is financing, there is less money and the big cake is getting smaller and smaller.”