Rampant consumption: tactics and strategy against inflation in Argentina – 06/15/2023 – Market

Crowded restaurants, long lines to get into the theater, shows that sell out within hours. Argentines with purchasing power respond with a frenzy of consumption to the rise of inflation, which accumulated 114% in the last 12 months.

“We are tired of economic problems. We are already so used to living so many years without stability that people just want to have fun,” Santiago Basavilbaso, a 25-year-old chef, told AFP.

“Today people have a slightly more precarious life. I had to change my tastes, change my purchases to cheaper brands, but without ceasing to have fun. I try to accommodate myself to the economy”, he added, while looking for the best prices on fruits and vegetables for your business.

Argentina is among the countries with the highest inflation in the world. The increase in prices has been a chronic problem in its economy, but it is now experiencing its highest peak in 30 years, with rates around 8% a month that suffocate the poorest (40% of the population).

“Today’s consumer strategies come precisely from families, they are behaviors that our parents and grandparents used throughout their lives”, said economist Martín Kalos.

“Buying a house or a car is unattainable. So what do you do (with the money)? You spend it,” explained economic analyst Salvador Di Stefano.

In Argentina, credit is now limited to small consumption and practically disappeared for larger expenses, such as buying a house or even a new car.

Interest rates, which vary between 100% and 150% per year, scare anyone looking for a mortgage loan.

Spending is driven at all levels of society. “Those who can’t take vacations go to a recital, those who can’t afford a recital go to eat a pizza and drink a beer”, stated Di Stefano.

TWO FOR ONE AND PURCHASES IN INSTALLMENTS

Prices rise so quickly that any purchase made with a credit card, if paid in full when due, saves some money.

“You have to adjust to your budget. The price of olive oil, salt, bread or coffee increases almost weekly,” commented Adrián Álvarez, a 63-year-old meditation instructor, who sometimes reaches the end of the month with money, sometimes not.

“When I don’t have any, I use my credit card. I play with a 30 or 35 day advantage. I take the merchandise for a price and pay later,” he explained.

In the supermarket where you usually do your shopping, the shelves have posters with all kinds of promotions: from taking two identical products to get a 70% discount on the price of the second one, to using a card from a specific bank on one day of the week to get 30% off.

Similar advertisements are displayed in the windows of clothing and appliance stores, establishments that also offer to finance purchases in up to 12 monthly installments, a way of “liquefying” prices.

SAVING IS HARD

“Inflation encourages people to spend faster, because saving is harder,” said Kalos. “Wages are spent faster and faster, the money stays less time in the hands of those who collect it because it loses value”, he explained.

“There is a great dispersion of prices. It is difficult to know if what you buy is cheap or expensive because the reference is constantly lost”, he added.

In this tangle of prices and offers, Ricardo Nasio, president of the consumer protection association Proconsumer recommends comparing a lot before buying.

“It’s important to have a culture of consumption, ask all prices before buying. It is very good to buy non-perishable food among several families, or store it to protect yourself from increases”, he exemplified.