The fall in retail sales in the country slows down

Sunday 5.5.2024

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Last update 16:44

SME retail sales fell 7.3% annually in April, at constant prices, and have accumulated a fall of 18.4% in the first four months of the year, according to the latest report from the Argentine Confederation of Medium Enterprises. In the seasonally adjusted monthly comparison, they rose 1.6%, which would confirm that the turning point of the recession was recorded during the first month of January.

This emerges from the SME Retail Sales Index of the Argentine Confederation of Medium Enterprises (CAME), prepared based on a monthly survey among 1,276 retail businesses in the country, carried out on May 2 and 3.

“Retail trade continues to feel the decreasing dynamics of the purchasing power of consumers, who have cut expenses in all areas. The only sector that emerged from this trend is clothing and textiles, favored for three reasons: due to the proliferation of offers; the very low base of comparison, since the industry has been very weakened since the pandemic; and due to the slowdown in prices in this particular item,” Came noted in its report.

But he acknowledged that in the fourth month of the year the return of interest-free installments could be observed in some stores selling appliances and construction materials, above all, which helped improve sales. And that before the reduction of import tariffs on some items sensitive to Argentina’s captive markets, such as household appliances and tires.

Economy tries to moderate inflation with such gestures, which it expects to be below 9% for April. But – far from the stated orthodoxy – Luis Caputo opens “heterodox” valves and postpones (with more impact in Amba than the rest of the country) the increases in electricity and gas.

The evolution of sales data for domestic consumption is one of the indicators that the national government follows the most. Javier Milei himself questioned those who ask for devaluation and highlighted the need to gain competitiveness through structural reforms. But the process of internal “disinflation” is a path as complex as it is improbable until now, except for the core inflation of some of the last weeks.

Macroeconomics is a ship that has not yet straightened its course. The latest report from the consulting firm Orlando Ferreres y Asociados, recorded for the month of March a drop in activity of 9.7% year-on-year, with a 12.8% drop in industry and almost a 25% decline in construction. This while national revenue fell 10% in real terms in the first quarter (-13% real year-on-year, in April), a record that worsens if the contributions of the country tax and withholdings, which mark foreign trade but are not directly linked, are deducted. to the “micro” that affects the daily lives of Argentines.

It is the sector that was “saved” from the generalized falls according to Came. Sales rose 8.8% annually in April, at constant prices and accumulated an increase of 5.9% in the first four months of the year compared to the same period in 2023. “In the month-on-month comparison, they rose 1.4%. sells everything that is on sale, which has quotas or discounts. From the stores surveyed they indicated that they continue to sell summer clothing, which has more affordable prices. Meanwhile, they pointed out that people are getting used to the values ​​of the clothing. seasonal clothing, especially coats, sweaters, and warm clothing in general, which came with very high values ​​in relation to family income.

In April, six of the seven items analyzed by Came recorded year-on-year drops in sales. The greatest annual contraction was detected in Perfumeries (-23.3%) and the only increase was in Textiles and clothing (+8.8%).

• Bazaar, decoration, home textiles and furniture: “The decline in April was 9.4% annually, at constant prices, bringing the fall for the quarter to 17.6%, compared to the same period in 2023. In comparison with last month, they fell 1.6%. “Sales were very slow, with empty stores and purchases more linked to making a gift.”

• Footwear and leather goods: “Sales had a decrease of 2.4%, always at constant prices, and accumulated a decline of 12.5% ​​in the first four months compared to the same months of 2023. In the month-on-month comparison they rose 2.6%. The change season did not favor footwear because the prices are higher, but the item cushioned the fall with the liquidation of items from previous seasons and the Simple Fee program offered by some stores.

• Perfumery: “Sales sank 23.3% annually in April, and accumulated a decrease of 31.1% in the first four months, compared to last year. In comparison with March, the decrease was 4.8%. It is the sector most affected by the economic situation because they are more expendable products”

• Hardware, electricity and construction materials: “Sales fell 11.2% annually in April, at constant prices, and the accumulated decline in the quarter is 22.5%, compared to the same period in 2023. On the other hand, compared to the previous month they rose 1.5% “The sector continues without reactivating, moving with small private works, spare parts, and some replacement of furniture or lighting.”

Less food and medicine

They are two items that serve as social markers of tolerance to the economic adjustment carried out by Javier MIlei’s management. In the first of them, “SME retail sales fell 7.3% annually in April, at constant prices, and accumulated a fall of 18.4% in the first four months of the year. In the seasonally adjusted monthly comparison, they rose by 1, 6%”.

Regarding sales in pharmacies, the report detailed that “the collapse in April was 18% annually, at constant prices, and adds up to a decline of 31.3% in the first four months, always compared to the same period in 2023. “In the month-on-month comparison, they fell 4.8%. Pharmacies have a high comparison base and that accentuates the drop in relation to other items.”