MercoPress. South Atlantic News Agency

Supermarket sales in Argentina plummet under Milei, UBA study finds

There are no positive signs on the demand side

Supermarket sales in Argentina have dropped by 8% while wholesale sales have plummeted by 22% under President Javier Milei, a report from the University of Buenos Aires showed Tuesday. The decline is attributed to adjustment policies causing high inflation and tariff hikes, which eroded wage purchasing power, redirecting spending from consumer goods to basic services, thus reversing a brief recovery between January and November 2023 (before Milei took office).

Industrial production also fell by about 5% in 2024, with textiles and basic metals hit hardest, though food and beverage production rose slightly. Despite some economic growth in early 2025, mass consumption continues to decline, with a 5.4% year-on-year drop in March and an 8.6% fall in Q1 2025.

Sectors like alcoholic beverages and hygiene products saw significant declines, while durable goods like appliances and cars surged due to credit expansion. Industrial producers remain cautious, with many expecting weak domestic demand and reduced capacity utilization in the near term.

“The recovery of sales observed from January to November 2023 came to an end, where the accumulated increase in wholesale sales was 4.60% and that of supermarket sales was close to 3%”, the UBA's RA Center specified in a report published on X.

The document also mentioned “a deepening of the fall in both wholesale and retail sales is foreseen,” which “is due, in part, to the loss of purchasing power of wages due to the strong inflationary jump resulting from the adjustment policies at the beginning of the government and the increase in tariffs that produced a reallocation of income from consumer goods to basic services.”

“Industry was one of the economic sectors most affected by the adjustment,” warned the study based on data from the National Institute of Statistics and Census (INDEC).

A typical family of four needed almost AR$ 1,150,000 (around US$ 1,000) in March not to be poor in the Autonomous City of Buenos Aires.

As for food and beverages, production increased by 6.9% in cumulative terms, being one of the least affected industries along with oil refining, which increased its production by just under 5% in cumulative terms by 2024.

“Despite the economic growth reported in recent months, the expectations of industrial producers are not good for economic activity in general and industrial activity in particular in the short term,” the report also pointed out.

The UBA study also referred to “an incipient recovery of economic activity on the supply side is observed in some productive sectors, mainly commerce and industry,” which nevertheless does not offset “even a small part of the destruction of activity generated by the government's adjustments,” with no positive signs “on the demand side,” probably “due to the deterioration of salaries due to the exchange rate delay and the liquefaction of these in some sectors of the economy such as the public sector and pensions.”