Deflation: Which products saw their prices drop in the first half of May to boost sales and compete with imported products?
May began with deflation in certain consumer goods , according to private consulting firms, as a strategy to boost sales and compete with the growing influx of imported goods, especially from Asia.
From businesses to manufacturing industries, prices began to drop in the first half of May after an April in which supermarkets saw a slight rebound, but SMEs ended the month in a difficult situation.
While Scentia reported a 0.1% recovery in sales , breaking a 15-month streak of consecutive declines, CAME reported that retail sales rose 3.7% year-on-year in April, although they contracted 1.8% compared to March. It warned of "very reduced margins due to the high cost of services, taxes and rents, and the low purchasing power that limited consumption, with many stores selling only essential items in an uncertain and difficult-to-sustain scenario."
With the dollar floating and consumption still struggling to take off, commercial strategies are being reconfigured and the need for increased merchandise turnover is becoming more pressing .
In food, in addition to the end of the restrictions, according to LCG , " specific public messages that sought to reverse increases, while also guiding collective bargaining agreements, influenced the calming of the markups ."
Vegetables, dairy products, eggs, takeout, and meats saw lower prices. Photo: Fernando de la Orden
"This type of tool, as long as it works as a complement (and not a substitute) for sound macroeconomic policies, is welcome to help coordinate expectations ," the consulting firm said.
Thus, its weekly survey showed a slowdown in the first half of the month, explained by the 1.6% contraction in the second week – the most pronounced in five years – due to a 4.9% drop in vegetables , 4.1% in dairy products and eggs , 2.2% in ready-to-go meals and 1.8% in meats , which predicts lower inflation for May, which could fall below 2% and be the lowest of the "Milei era", after the 3.7% in March and the 2.8% in April.
Meanwhile, the Econviews survey showed a 0.2% drop in food and beverage prices last week, with the largest declines in vegetables, at 2.8% , and dairy products, at 0.8% .
" Helped by the Hot Sale, the same thing is happening in other sectors, " which aren't detailed in their price preview report, LCG noted. The fact is that, to a large extent, the discounts in other sectors last week were related to the discount event organized by the e-commerce sector, which ran until this Sunday.
Last week's price drops were largely related to the Hot Sale. Photo: archive
In this sense, the price decline extends beyond food to sectors such as electronics, technology, clothing, household goods, and construction. Companies like Aluar , for example, lowered their aluminum prices after the elimination of the Country Tax to boost domestic demand and offset the drop in exports following the increase in tariffs by the United States.
Just to illustrate the search for savings, according to industry data, 90% of Hot Sale sales were made at a discount . "In a week marked by the Hot Sale, which impacted sectors such as clothing, electronics, insurance, furniture, and hotels, our national CPI surveys showed deflation for the first time: -0.2% ," Equilibra reported.
Clarin
