MercoPress. South Atlantic News Agency

Argentine SMEs report sharp drop in sales

Textiles were the only exception with a small increase after a big drop the previous year

Argentina's Chamber of Small and Medium-sized Businesses (CAME) released a report Sunday pointing out that retail sales had suffered an interannual drop of 28.5% last month as a result of the loss in purchasing power by consumers affected by President Javier Milei's latest measures. Sales also fell by 6.4 % from December, CAME said.

“This beginning of the year was characterized by a bad performance in the commercial sector, marked by scarce transactions and a low influx of public in the premises,” the document noted.

Other official and private measurements have also reported a strong decline in consumption in Argentina amid high inflation (211.4% in 2023 and 242.2% year-on-year in January according to private consultants).

January was a “lost month” mainly “due to the economic uncertainty and the sharp increase in prices, which was not accompanied by an adjustment in wages,” the businesses pointed out while hoping demand would bounce back this month.

“For the average consumer, everything turned out to be expensive, which led to a more careful selection of purchases, prioritizing the most urgent needs to safeguard income,” the report further stated.

However, the textile sector achieved an increase of 0.9% from January 2023 when it had fallen 14.4%. “This increase is attributed to the combination of attractive offers and the purchases made in large quantities by international tourists who visited Argentine cities,” the CAME report explained.

By sectors, six of the seven items surveyed in December recorded year-on-year declines in their sales, where the largest annual retractions were detected in Pharmacies (-45.8%) followed by Food and Beverages (-37.1%).