Consumption ended 2020 with positive signs

The consumption ended 2020 giving good signs, although the most important data will be published by the Indec this Wednesday. What is known for now is that supermarkets ended the year selling 2.6% more than what they billed during the last month of 2019, upon the closing of the management Let’s change. For their part, shopping malls continued to register a significant contraction, of 32.7% year-on-year, due to the restrictions that the pandemic, but that meager result implied an improvement over the previous month.

These numbers were published by the Indec through the reports of the surveys of Supermarkets and Shopping Centers, corresponding to December. Supermarkets managed to reverse, in this way, a run of four consecutive months of pure year-on-year falls. After a good performance at the beginning of the quarantineWhen households resorted to stocking, then the rest of the year was a contraction in sales.

On the side of shopping malls, they are still far from recovering pre-pandemic levels but, month by month, improvements continue to be registered. Or rather, slowdown in the fall. While 2020 closed with a contraction of 32.7%, in November the drop had been 46.7%, in October it was 67.9% and in September it was 81.4%.

The billing of wholesale self-services, for its part, it grew 9.1% year-on-year. This item did not show falls at any time of the year, but the improvement in December was the best since the peak in March, at the beginning of the quarantine.



All in all, the household demand continues to recover much slower than the offer, which is what pulled, up to here, to a economic activity that between February and November managed to fall only 3.3%, a performance that leaves the country in the middle of the table at the continental level (Canada, U.S Y chili experienced stronger contractions).

During the hardest part of the quarantine, the rigidity of the isolation it caused companies to stop producing. But, at the same time, essential shops they continued to operate, so the contraction in consumption was less violent than that of the productive supply. That generated loss of stocks. By partially relaxing the quarantine, the recomposition of those stocks It allowed an extraordinary rebound in, for example, the industry, which has already recovered everything lost and even achieved a growth of 2.5% between February and December. That is, a faster bounce in the offer. On the demand side, it looks slower.

However, signs of a recovery are being observed. This Wednesday the Indec will show the data updated to December for all the trade. It is to be expected that the number will not be as good as that of November, when the improvement in the sector was 3.9% year-on-year, since in the last month of the year there was a drop in real salary 2.1%. But the dynamics are already around the pre-pandemic levels, after a March-October of strong contractions. The same could not be said for restaurants and hotels and for the shows and cultural events, because of the restrictions.

Prices and wages: a real improvement will be the key in the future

What will determine the continuity of the dynamics of consumption is what happens with wages. The issue is becoming a priority, facing the joint and negotiations to agree wages and prices. Between December 2020 and the same month in 2019, the real contraction of wages was 2.3%. But it was mounted on a previous collapse of 17.8% between December 2016 and the same month of 2019, always according to the data published by Indec through the Salary Index and from National CPI. In total, a fall of 19.7%.

Based on data from the registered wage earner sector, a recent report from Cipher-CTA He noted: “A diagnosis of the state of the wage situation is of particular importance in the framework of the opening of joint negotiations and the government’s attempt to carry out a price and wage agreement. It should be noted that there is a not inconsiderable heterogeneity in the salary evolution of the last five years. While the real wages of registered workers in the private sector suffered an average reduction of 15.4% between November 2015 and the same month of 2020, half of the workers had falls of more than 19% ”.

And he added: “Of the 295 branches of activity, 152 experienced reductions in real wages above 20% and within this universe 50 branches registered falls of more than 30%. It is clear that for all of them a price and wage agreement that slightly exceeds inflation will not be enough. The same applies to public sector workers whose real wages had a 29% drop between November 2015 and December 2020 ”.

Electronics and household items: they pulled hand in hand from the gap and the Now 12

In December, in supermarkets, one of the keys that drove sales was the electronics and household goods sector, whose turnover rose 66.3% nominal year-on-year. When deflated against Recreation and Culture and Home Equipment inflation, it is observed that the improvement in these sales, influenced by the exchange rate gap and the expectation of devaluation, was between 12.3% and 20.7%. Dairy products grew just 29.9%, which implies a real contraction of 8.6% when deflated against the CPI Food and beverages. Bakery sales fell 16.1% in real terms. Those of meat grew 7% real. Clothing, footwear and textiles fell 14% in real terms.

The improvements in the consumption of household appliances have been driving activity and the phenomenon continued in January. From the Center for Production Studies (CEP XXI), they pointed out: « According to sources consulted, programs such as Now12 (which has had a three-month grace period since October) are having a direct impact on the consumption of branches such as household appliances (which strongly pulls on the steel industry and, to a lesser extent, on the plastics industry) « .