As in 2016 and 2017, the increase in utility rates will put a brake on consumption

The advance registered by mass consumption during the first half of the year will find a new brake NA

Although new prices for gas and electricity services have been in force in the country since yesterday, It will be in the last quarter of the year when the impact of the rate increase hits the pockets of users fully. Combined with a scenario of economic uncertainty and the perspective of an acceleration of prices that does not let up, the first victim of the tariff adjustment will be mass consumption. That is what has already happened, the specialists point out, between 2016 and 2017, when the previous administration implemented the hardest section of what the Government now calls “redistribution of subsidies” but that in the ballots translates as a strong increase. This antecedent added to behaviors that are already beginning to be noticed in the different measurements and private surveys, indicate that the advance registered by mass consumption during the first half of the year will find a new brake. Thus, in the best scenario, the balance of 2022 would be a very slight rebound compared to the decline that has been recorded in the last 6 years. In concrete figures, the advance accumulated during the first seven months of the year, which reaches 4%, could be reduced to barely 1% by the end of the year.

“During the first part of the year, mass consumption, understood as packaged food, beverage, cosmetic, hygiene and cleaning products, advanced largely because the comparison base for last year was very low. But from now on the indicators are going to be all negative”, anticipated Osvaldo del Rioowner of the specialized consultancy firm Scentia. The expert clarified that several factors come together in this result: on the one hand, that consumers will have fewer resources available due to the fact that they will have to focus a greater part of their budgets on paying tariffs, but also the deterioration of income, a variable that They also measure. On the other hand, the base of comparison is also higher since towards the second half of last yeara post-pandemic recovery began that will no longer be sustainable.

In the best scenario, the balance of 2022 would be a very slight rebound compared to the decline that has been recorded in the last 6 years

“All categories of consumption are deteriorated, although basic foods are what resist the most. Even in July, a particular phenomenon stood out, which produced an increase in sales that we did not expect,” admitted Del Río, who explained that during that month a jump in consumption was registered in supermarkets in essential categories such as oil, coffee, rice, pasta. dry. He attributed this rise to a stocking phenomenon, given the unpredictability of what was coming. In this regard, in July A greater availability of income from the Christmas bonus and payment of some official aid coincided with the closure of imports, which created the possibility that some products would be scarce or greatly increase in price.which in fact registered a rise of 6% per month.

Faced with this reality, consumers reacted by anticipating purchases. But they did it exclusively in supermarkets, where the increase was close to 8% while it fell in neighborhood stores. The greater capacity of the large chains to temporarily absorb increases and cushion the transfer to the prices of the gondolas is one of the factors that led, according to Del Río, to the greater consumption being concentrated in supermarkets to the detriment of nearby businesses. .

“During the first part of the year, mass consumption advanced in large part because the comparison base for last year was very low. But from now on the indicators are going to be all negative”, anticipated Osvaldo del Río

But there is a second factor that contributes to concentration: Prices Care. The official price programs do not reach neighborhood businesses, so buyers seek to buy cheaper in the supermarket. “The weight of Care Prices in total sales is enormous and the difference between sales channels is increasing,” said the specialist.

In any case, the outlook for mass consumption is consistent with the expected trajectory for all economic activity until the end of the year. Although the economy will close the year with an advance of around 3%, that level will be reached by averaging the growth of the first semester with the retraction that the lack of dollars has imposed since last month. In this sense, the impact of the stocks on imports is a recession for the last two quarters of the year from which mass consumption will not escape.

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