How the Year Started for Mass Consumers: Improvements for Supermarkets, Weaknesses for Small Businesses

In January, supermarkets recorded a positive performance while independent supermarkets suffered a setback (DYN)

The year 2023 began with a 1.6% decline in sales in the consumer goods sector, which includes food, beverages and personal care products sold in large supermarket chains, self-service stores and local businesses. The difference comes from the comparison between last January and the same month of 2022.

However, the situation was very different for different types of trade and different regions of the country. While large supermarket chains saw a 7.8% rise, smaller businesses – independent supermarkets – fell 9.1%, according to data from consultancy Scentia, with information from more than 20,000 points of sale.

At the same time, although the trend is similar in all regions of the country, there is a slight growth in sales of 0.5% in AMBA and a decline of 2.9% in the interior, for the whole sector. mass consumption.

“The difference in behavior between the chains continues, as supermarkets performed positively while independent self-service stores suffered a decline of 9.1%. This situation, with a marked difference progression between the two channels, began in July 2022 and continues to this day,” he explained. osvaldo del rio director of the consulting firm.

Official price agreements are only valid at major chains

Bases of comparison are one of the variables that explain this trend – in previous years, self-service stores have grown more than large supermarkets – but there are also other reasons, such as the price gap between canals. Official price agreements, such as Precios Justos, are only in effect in the main chains, which cover around 30% of the market.

Among the items that fell the most were laundry and household maintenance, with a drop of 10.5% for laundry and household maintenance products and 5.4% for hygiene and cosmetics products. Only three categories retain a positive result in the sum of the two channels: impulsive (including sweets) with 6.4%; alcoholic beverages (3.4%) and non-alcoholic beverages (0.5%).

The weighted average price of products maintains the acceleration observed in recent months: price increases reached 98.7% in January compared to the same month in 2022.

During the renewal of the Fair Prices agreement at the beginning of February, the Minister of the Economy Sergio Massa He explained that since the implementation of the official program – in force since last November – sales in the large supermarket chains, where the products are available, have increased by 6% compared to the rest of the small businesses.

For the trade and services sector in general, the year began with a 5.5% increase in consumption during the month of January, compared to the same month of the previous year. However, if compared to December 2022 – the previous month – there was a drop of 0.3% and in the private sector they are already forecasting that in the second quarter of the year a drop will also begin to be observed from one year to the next. the measure.

The estimates correspond to a new survey that has begun to be carried out by the Argentine Chamber of Commerce and Services (CAC) and which reflects the evolution of household consumption of final goods and services. The chamber which brings together the commercial sector also warned about the purchasing power of households, which at the start of the year showed a monthly contraction of more than 6% and a drop of 1.6% year-on-year.

With these indicators, the CAC predicts that negative figures for consumption could start to be seen in the second quarter of the year, compared to the same months of 2022, the month of the greatest recovery in consumption last year. “We are seeing a clear stagnation in consumption, in a context of macroeconomic distortions, lack of financing and lack of foreign exchange which is generating a drag on activity. A positive scenario for consumption in 2023 could be on par with 2022,” he said. matias wilson Chief Economist of the ACC.