Andrés Lerner 
Mass consumption in Argentina dropped again in March. According to a report by consultant firm Scentia, supermarket spending plunged 7.3% year-on-year. The problem is seen in all types of sales: from wholesale vendors and self-service chains to pharmacies. Due to a drop in purchasing power, sales are falling, impacting a key element of the economic plan: the image of President Javier Milei. According to a study by the Universidad Torcuato di Tella, government trust has fallen 4.4%.
The latest Scentia survey lays bare a dramatic scenario for the retail sector. While sales in supermarkets are down 7.3% YoY, wholesale outlets and drugstore chains register a 10% and a 20.2% drop, respectively. Independent self-service stores were unable to offset the trend and had a 7.6% drop in the same period.
According to Economy Minister Luis Caputo, people are not validating the high prices set by stores. But the drop is being felt across all sectors and items. Mass consumption is registering drops in all categories: food, 2.2%; alcoholic beverages, 13.1%; hygiene and cosmetics, 11.2%; cleaning and household items, 6.1%.
These are not luxury goods or purchases that can be postponed. The situation reflects the loss of purchasing power that has been taking place since December. Indispensable family products such as milk, for instance, registered a 20% drop in the first quarter of 2024.
Confidence is beginning to wane
Society’s mood appears to be holding up for now. The question is for how long. The reports cites Central Bank Vice President Vladimir Wening saying that social support is key for the sustainability of the economic plan, considering that the administration has little parliamentary strength and no presence in district governments.
Wening praised society’s support in a presentation in Washington. “After 4 months in office, confidence in Milei’s management is still high, as it usually happens after an election,” said the report presented to investors.
The Universidad Torcuato di Tella published its monthly Government Trust Index (ICG, for its Spanish initials), which showed a 4.4% drop in April. According to the survey, current confidence levels are 9.9% lower than they were in April 2016, during Mauricio Macri’s term, and 25.4% below what Alberto Fernández registered in April 2020.
According to the report, ICG variation was negative in four of its five components: general government assestment, concern for the general interest, efficiency in the administration of public spending, and problem solving ability. It only showed an upturn in item “honesty of public officials.”
The same study shows that the economic outlook worsened among those surveyed. The group of people who believe that the economic situation will improve within a year fell by 2%, the same as those who believe that it will remain the same. The number of people who think things will get worse grew to 5%.
