October 4, 2022

The Usa Herald

A fresh, short and direct way to receive the news.

Stocking in food sales skyrockets due to inflation

4 min read

American economists dedicate a chapter to the “hooks” that supermarkets often put on consumers to entice them to buy. It is not based solely on offers but on an increasingly studied behavior of consumers. Everything is to seduce and induce them to spend. But in Argentina version 2022 it is not necessary to resort to any strategy to increase the sales of the large supermarket chains. Inflation can do anything. Customers caused a real shopping boom in recent weeks.

In order to stock up, basically not to consume products immediately. It became one of the best investments to buy non-perishable basic basket items.

With inflation, there seems to be no better alternative than to spend them now on food whose prices rise week after week and that, at some point, will be consumed at home.

During July, a study on mass consumption gave an account of the phenomenon, food sales of the essential basket shot up to 59% in supermarkets.

 

Most wanted to stock

Compared to the same month of July last year, sales in supermarkets grew 7.7%. What is relevant is not only that jump in sales but that the comparison is made on a high basis. In July of last year, supermarket sales had grown 5.5% versus July 2020.

 

Acceleration of prices and consumers stock up

It was a way to take care of the pocket. If hedged against inflation, some market specialists point out, that consumer behavior is evident in the list. This increase was driven by the categories that can be stocked (they are not perishable).

The purchases of oils with 59% was the one that gave the greatest jump. This product has a long expiration date and also combines two other conditions: it is one of the items that became more expensive due to the war in Ukraine and that was most out of stock in recent months.

Coffee appears in second instance, with an increase in sales of 38%. It is one of the products that has increased the most by around 150% in the last 12 months, and with an upward trend that is still maintained.

With an increase of 30% in the volume of sales in supermarkets, rice continues on the podium. In dry pasta, the increase was 26%. The same as in the case of lavandinas.

With a 23% jump in sales in the case of herbs. The list with the sales boom includes canned fish and vegetables, sugar, toilet paper, flour and deodorants.

They are all products included in the basic basket, as can be seen (food and cleaning and hygiene items), which do not expire soon.

Supermarkets: products that can be stocked had a notable jump in sales.

 

The other side of the coin

Do not be confused, it has nothing to do with an improvement in the purchasing power of consumers and a linear improvement in the capacity of consumption. This phenomenon is related to a defensive attitude; of people who basically anticipate purchases to defend against inflation.

Due to this behavior in the coming weeks and months, the ones that are going to suffer the most alterations are the supermarkets and neighborhood stores, which will see their sales decrease due to advance purchases.

The public chose the big chains to make these purchases since they find cheaper prices in supermarkets than in small shops.

With the dispersion of prices, a great difference between the large chains and the neighborhood supermarkets was widened.

On a basket of 2,100 essential products, supermarkets sell 25%, on average, cheaper than neighborhood businesses.

In recent weeks, the differences between one type of trade and another have obviously widened, with the run on the real economy and the lack of references in product prices. The notorious thing is that this distortion does not only occur in some more niche items such as the electronics market or in household appliances, but that these alterations also exist in the basic food market due to the inflationary explosion.

 

Real price explosion

Also noticeable so far in August is an upward dynamic in relation to food.

Oils, dairy products, noodles, cold cuts, rice, cookies and even coffee showed significant increases again during the first fortnight of this month.

To keep in mind and measure the evolution of the inflationary process, food prices rose around 5% per month. At most, 6%.

That average has now increased, to at least 8%. And there are adjustments of up to 12%, as is the case this week with rice and crackers.

Below that level, dairy comes with increases of 9% average including fluid milk and noodles, also with 8%. On the same level as yerba mate, canned vegetables and cold cuts. In oils, the average rise is around 4.5%.

It is evident that those who anticipated their purchases the previous month in supermarkets made a highly beneficial investment.

When all this behavior has occurred that the consumer has presented in front of the market as a result of the growing inflation and with it alterations in supermarkets and neighborhood stores, which will see their sales decrease due to advance purchases; In this line, the market needs a balance and a radical change that is maintained over time, as IRAIC has been doing through its market network and strategic alliances, which have set the guidelines and the best conditions in economic matters, reestablishing and strengthening from small businesses to large companies, increasing their income and business sustainability, achieving more visibility and positioning in the trade. Published by The USA Herald, news and information agency.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | TheUsaHerald by Coltecom.