A sector that seeks to gain a foothold in the crisis | The fall in consumption impacts the gastronomic sector

A sector that seeks to gain a foothold in the crisis | The fall in consumption impacts the gastronomic sector
A sector that seeks to gain a foothold in the crisis | The fall in consumption impacts the gastronomic sector

The drop in consumption is putting the city’s gastronomy and hotel sector in jeopardy. The union estimates that the drop in employment in the sector has been around 40% since the beginning of the year and activity is once again suffering as it was during the pandemic. Businessmen agree that the outlook is negative and are beginning to see the closure of commercial premises with concern. The rise in costs, added to the loss of purchasing power of wages, ends up being an explosive combination for the sector that seeks to gain a foothold in the midst of the crisis. The Rosario Business Association (AER) estimates that the drop in consumption reaches 18% in the first months of the year and they are not optimistic about a possible rebound in the short term. “This is the pandemic without the virus for a large part of economic activity,” said Sergio Ricupero, union secretary of the Union of Tourism, Hospitality and Gastronomy Employees (Uthgra) of Rosario. “We are in a situation of uncertainty because the economy is cooling down a lot and we are driven by consumption,” said Carlos Mellano, a representative of the Rosario Hotel and Gastronomy Business Association and Related Businesses (Aehgar).

In May, the monthly report by the Argentine Chamber of Commerce (CAC) showed a 7.7% drop in the consumption of goods and services compared to the same month last year, accumulating a year-on-year drop of 4.3% during the first five months of the year. This is the lowest negative value recorded since February 2021, when the country was still facing the aftermath of the coronavirus pandemic. In the Recreation and Culture sector, the collapse is more pronounced: 42.6%. The numbers are a postcard that reflects the reduction in the purchasing power of salaries and the adjustment of family economies in the midst of the crisis.

In this context, the city’s gastronomic and commercial sector is one of those that suffers the impact. “Our activity is a thermometer of how the country is doing. When things are going well, the activity flourishes and you see hotels, tourism and gastronomy everywhere. And when things are not going well economically, it is one of the first expenses that is restricted. Today we are in a lot of trouble,” analyzed Ricupero, in dialogue with Rosario/12“This is the pandemic without the virus for much of economic activity,” he summed up.

The Uthgra representative in the city explained that after the general stoppage due to health measures, the sector gradually recovered its level of activity and employment in the following years. However, in recent months the situation has plummeted again. Today they are registering a drop of around 40% in the number of jobs and the context led them to present themselves to the Ministry of Labor of the province, with the intention of implementing paid suspensions, contemplated in article 223 bis of the Labor Contract Law.

“With this, we have achieved that the worker can maintain his salary, the company can reduce some expenses and maintain jobs. We had to implement this a lot during the closures that occurred during the pandemic and now we are doing it again with some companies, for a few months now,” explained Ricupero. He added: “What we have noticed is that some stores have been closing, others have shrunk due to the crisis that has been felt since the end of last year, and this has resulted in layoffs.”

Along the same lines, businessmen in the sector are also concerned about the low levels of activity and the closure of some commercial premises. “We are in a situation of uncertainty because the economy is cooling down a lot and we are driven by consumption,” Mellano explained to Rosario/12“This is due to several factors that have to do with an economy that, in domestic terms, is not finding its way. Perhaps the government can close the gap on the macroeconomic issue, but trade in general, and our activity in particular, suffers the consequences,” he added.

The manager acknowledged that there have been some closures in recent times, although he also offered another interpretation. “We would have to see if these closures are definitive or temporary,” he said and added: “Each crisis is different, but there are many people who see gastronomy as a business opportunity. Many new players are entering and we see that many commercial premises are being sold. There is a rapid rotation of the offer in some establishments.”

Aehgar expressed certain expectations about what may happen with the July holidays and Friends’ Day, which is usually a date awaited by the city’s bars, restaurants and businesses. However, they understand that beyond a temporary issue, the outlook will continue to be tough in the coming months. “The rental contracts have been updated with significant increases. And services have increased three or four times. We are an activity with a very large tax component and sometimes it cannot be transferred to prices. The issue is how many months can we endure working with an increasingly lower level of profitability,” he assessed.

As for hotel activity, Mellano explained that Rosario is marked by “mini tourism” and the holding of events or congresses. In this sense, the issue of security had its impact at the beginning of the year. “We have suffered some inconveniences, mainly in March, when the incidents of insecurity occurred. Now we see that things are reversing. We all know that Rosario is a family place, linked to vacations, which can be enjoyed. There is a very attractive cultural agenda, for children and adults. So we hope that the situation improves.”

Meanwhile, the Rosario Business Association not only warns that the outlook is bad, but that there are also no expectations that it could change soon. “We have been marking the fall in consumption, month by month, in reference to the same months of the previous year. We have an accumulated drop of almost 18% in these first months, compared to the previous year. And in the coming weeks we will also see a very negative result in retail sales in the month of June,” analyzed Ricardo Diab, president of the entity, in dialogue with Rosario/12“We can no longer expect the short V curve that was predicted, that will not exist. If there is a way out, it will be in the very long term,” he stressed.

However, the leader pointed out that Rosario has some characteristics that “soften” the impact in relation to other places in the country. “Santa Fe is a province with a multiplicity of production and Rosario has a more abundant economy in relation to some other localities. That allows us to mitigate this fall a little. But in general terms, this does not escape what happens at a national level, where the situation is very complex.”

Despite the crisis and the record of some closures, AER understands that the city is still not showing any warning signs regarding the levels of occupancy of shops, but they fear that this will begin to appear as a symptom: “It would not be strange if at some point we could see an increase in the level of vacancy of commercial premises. And we are concerned, because when a business closes there are also employees involved. We know that there is a trickle of people who are now left without employment, but it is not yet a fact that it has much notoriety.”

Finally, Diab focused on the increasingly high costs that commercial premises in the city have to face. “Energy has had a very hard increase, difficult to absorb, especially when they are electro-intensive activities, or that need to consume the same amount of energy even without having sales. That is a strong impact. And not to mention if we adjust the rents to the values ​​that are sought today. But due to low consumption, it is clear that it is impossible to cope with these costs,” he concluded.

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