Nielseniq projects a 14% deceleration in the drop in average consumption for the second semester of 2024
The study deepens market behavior, offering projections for the rest of 2024 and early 2025.
Nielseniq (NIQ), world leader in analysis and consumption data, presents a detailed report on the trends of mass consumption in Argentina of the first five months of 2024. The study deepens market behavior in a complex economic context, offering projections for the rest of 2024 and early 2025.
NiQ's study reveals a decrease in the purchasing power of Argentines during the first quarter, due to the end of price controls, and it is estimated that this can affect the rest of the year. However, in the last bimester, a slowdown in the fall in consumption was observed, coinciding with a lower inflation rate, which suggests a possible recovery by 2025. Despite this brake, it is still necessary to implement the tariff adjustment that may imply an additional loss of purchasing power of around 15%. The length of the stock could accelerate inflation and impact even more on the available income.
According to the NIQ analysis, although it is projected that mass consumption will continue to decrease in the remainder of 2024, approximately 14% on average until December, this fall is expected to be slowly slowed down. While the recovery will not be immediate, a positive trend change for the first quarter of 2025 is anticipated.
During the first semester of 2024, Argentine households, with a long career facing economic crises, used various tactics to make their money, including the search for cheaper brands and waiting for promotions.
Main conclusions of the first semester of 2024:
- Expenses reduction: Consumers have reduced their expenses mainly in leisure and clothing. One in three has cut expenses in appliances and beauty products, while food is the least affected category.
- "Downtiering" as savings strategy:
- In high disbursement categories, economic brands gain ground. In products such as clothing soap, segments to dilute and powder increased their participation due to their savings of 20% and 30% respectively against regular fluids.
- In edible oils, there is a growth of economic brands, with large sizes (1.5 liters) gaining popularity.
- Changes in drinking and food consumption:
- Without alcohol and powdered juices are seeing an increase in the demand for cheaper brands and returnable formats. The drinks were the first category that reacted to the crisis and began to fall, and now it is the first to recover slowing down the fall in consumption.
- In dairy, categories such as spreadable cheeses and fluid milk see an increase in economic brands.
- In cookies, consumers prioritize the price on the brand, choosing products with disbursements less than $ 2,000.
- Reconfiguration of sales channels:
- Supermarkets and self -services show a lower contraction than the average, while the traditional channel is the most affected.
- E-commerce and wholesalers are the only channels that maintain a positive trend.
- In the traditional channel, soft drinks, beers, powders to prepare juices, flavored waters and dry sweet cookies are the best -selling categories.
“During this first half of the year, 94% of the categories contracted in 2024, however, the impact is not the same for all. Most of the high disbursement categories falls above the average of the basket, while the categories of lower disbursement contract below the average. There is a much greater trend in Argentina than in the rest of Latin America's countries to buy cheaper brands, this being one of the strongest savings strategies, ”he said Javier González, commercial leader of NIQ Argentina. And he adds: "Proximity supermarkets and wholesalers were the ones who were better positioned at the crisis, while stores were the most affected."
For companies, it is crucial to develop differentiated strategies depending on the channel, the purchase mission and the type of consumer. In the traditional channel, prioritizing low disbursement and high rotation products will be essential for correct execution and adaptation to new market dynamics.
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