Food manufacturers

Is “stagflation” coming? The fear of grocers and food manufacturers

Argentina could be immersed in a complex scenario that is beginning to be talked about around the world: the “stagflation”. It is essentially the combination of economic stagnation with high inflation.

The top inflation in Argentina it’s already common currency. Economic stagnation, on a small scale, begins to manifest itself in the form of a drop in consumption. the grocers and the Shops nearby they feel it and recognize it.

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“It’s ‘stagflation,’ plain and simple.” The sentence was not said by an economist, but by a history of the warehouse sector. to worry by a Decrease of sales, again nascentalso extends to companies in the food and beverage sector.

The concern in the industry consume massively is already present. Neighborhood merchants, like butchers, feel it: They can’t raise their prices too much or they lose customers. The problem, of course, is that their suppliers are increasing. And what’s starting to happen is that companies are starting to give up margin to avoid losing customers.

Consumption suffers from rising prices

The numbers explain what happened in February. According to the consulting firm Focus Market, which with the firm Scanntech reads the product codes in nearly 700 points of sale, consumption fell by 3% in the second month of the year.

the growth in januaryhowever, realize that over the two-month period consisting of January and February, the trend is still barely positive (+0.4%).

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“In the second month of the year, consumption in local formats fell. Inflation is acceleratingthe pocket loses purchasing power again and the acceleration in prices leaves a worrying situation even for the middle class, which is beginning to feel the impact of completing a total basic basket,” said Damián Di Pace, director of the consulting firm.

The data is worse in the case of food.  The fall in January and February together was 4.9%.  (Photo: Wal-Mart)
The data is worse in the case of food. The fall in January and February together was 4.9%. (Photo: Wal-Mart)

The data is worse in the case of food. The fall in January and February together was 4.9%. The category ” personal care ” also fell, in this case by 3.7%. In place, beverages increased by 4.1% and cleaning by 2.2%.

A consumer expert explained to NT Why is this scenario unfolding? It is difficult for consumption to grow in volume year on year because, so far, was inflated by “to put money in his pocket” People.

In other words, if there is no generation of mass consumption by more real employment, the landscape will be more and more complicated.

As has happened in other places in the world, Argentina could have in 2022 highest inflation since 1991, that is to say in 31 years. Estimates for this year are around 55%. Around the world, the general rise in prices is beginning to show, but to this is added the complication of activity due to the war between Russia and Ukraine.

For example, the Danish government warned this week that its economy could end in a stagflation if energy imports from Russia were interrupted.

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