A vegetable section in a supermarket in Buenos Aires, on June 12, 2023 in Argentina (AFP / Luis ROBAYO)
Some store, to protect themselves from an unpredictable price in three or four weeks. Others juggle 2nd, 3rd marks, or infinite monthly payments.
Others finally consume as if tomorrow did not exist… Faced with an insane inflation, each Argentinian has his strategy, each one does as he can.
Crowded restaurants, queues at the cinema, mega-concerts with tickets sold out in a few hours… A foreign visitor to Buenos Aires would be struck in places by the apparent contradiction between a country with 114% inflation (out of the twelve months), dangerously close to insolvency, but overflowing with consumption, with life… Vitality of despair?
A cheese stall at the Central Market in Buenos Aires on June 13, 2023 in Argentina (AFP / Luis ROBAYO)
“As a society, we are exhausted by economic problems. So used to living for years without stability that people just want to have fun,” Santiago Basavilbaso, a young independent chef, told AFP while he unearths good wholesale prices at the Buenos Aires Central Market. He says he “changed (his) tastes, (his) purchases, took cheaper brands, but… without ceasing to please (me)”.
A fruit stall at the Central Market in Buenos Aires on June 13, 2023 in Argentina (AFP / Luis ROBAYO)
The frenzy, too, betrays a product that is now overpriced for part of the middle class: the dream of buying a house, a car. A fortiori in a country “dollarized in its head”, or lack of confidence in a depreciating peso, the greenback is the key to any major transaction.
“A house: out of reach. A quality car: out of reach. So what if I can never buy a house or a car or travel far? I spend…”, diagnostic Salvador Di Stefano, chief economist of the SDS consulting firm.
– A house, if not a pizza –
“At another level, he continues, whoever does not even have money to go on vacation goes to a concert.
Consumers in a restaurant in Buenos Aires, on June 13, 2023 in Argentina (AFP / Luis ROBAYO)
And whoever can’t even afford a concert will treat themselves to a pizza and a beer”. And the terraces, deceptively, are filling up. At least in the capital.
In shopping centers, stores, enticing signs play the seduction offline: payment in 3, 6 or 12 monthly installments, just to “liquefy” the price. Not only for “important” purchases such as household appliances or bedding, but also for clothing, a pair of shoes.
A clothing store in Buenos Aires on June 12, 2023 in Argentina (AFP / Luis ROBAYO)
“We pay everything in + cuotas + (monthly payments). Otherwise with a single month’s salary it is difficult to buy certain goods, and unbearable to save several months to see this purchasing power go up in smoke with the inflation”, deciphers Martin Kalos, economist of the firm EPyCA and teacher at the University of Buenos Aires.
But a majority does not succeed, even with “cuotas”. So they store.
Basic necessities, non-perishable, which they keep at home, “betting” on future inflation.
Customers in a supermarket in Buenos Aires, on June 13, 2023 in Argentina (AFP / Luis ROBAYO)
“For example at the beginning of June I buy ten bottles of oil with my credit card, which I will pay for in July”, but at the initial price. And so for the months to come, “I save on oil”, summarizes Mr. Stefano.
Which, however, qualifies the extent of the phenomenon: in a country where the poverty rate reaches 40%, many, by force, “do not buy more than they consume”.
– Inherited anti-inflation reflexes –
Another trap to avoid is the broken price compass. With 8% inflation per month on average, and “a great heterogeneity of prices, it is difficult to know if what we are buying is expensive or cheap, because we are constantly losing the reference”, underlines Mr. Kalos.
Customers in a supermarket in Buenos Aires, on June 13, 2023 in Argentina (AFP / Luis ROBAYO)
So the consumer becomes a tracker. Promotions, “for 2 products purchased, the second at 30%”, differences between two supermarkets, between two brands… Or he adjusts – downwards – the quality of the product. Or the product itself: less beef, more chicken.
Proconsumer, a consumer defense association, actively recommends maintaining this “consumer culture: comparing, checking prices before buying.
It’s also very good to buy non-perishable food between several households, and store it to protect yourself from future increases”, advises its president Ricardo Nasio. “And if you have a 100 dollar bill in a drawer, you guards. A week later, you gained 15% “purchasing power in pesos”.
But nothing really new there for the Argentines. “The defensive strategies of today’s consumers come from our families. Behaviors that our fathers, our grandfathers, used all their lives”, analyzes Mr. Kalos, in reference to the hyperinflation of the 1980s, or the “Great Crisis” of 2001. For thirteen years, the country (re)lives with double-digit inflation.
© 2023 AFP
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