Bleak Projections for Latin American Food Industry as Sales Volume Plummets

At the Retail Day LATAM event held at the Buenos Aires Convention Center, food supply companies, supermarkets, and market analysts gathered to discuss the challenges facing the industry. One concerning statistic revealed was a 15% decline in sales volume at large chains in April compared to the previous year, reflecting a general downturn in consumption.

According to Javier González from Nielsen IQ, sales in large chains have seen an average decline of 18% in the first three months of the year. Consumers are being more selective in their purchases, opting for cost-effective options and reducing discretionary spending. This shift in consumer behavior is a direct response to the economic pressures affecting household budgets.

Projections for the rest of the year do not look promising, with estimates suggesting a 9% year-on-year decrease in mass consumption. Inflation, though slowing down, still exerts pressure on prices and wages, making recovery difficult for consumers.

The trend of offering more products at lower prices is becoming more common in response to the economic challenges. Brands with lower prices are gaining market share, while consumers are gravitating towards cheaper options or smaller quantities of leading brands. Some product categories are being sacrificed as consumers prioritize essential purchases.

Osvaldo del Rio, president of consulting firm Scentia, attributed this decline to a 13-14% drop in income in the first quarter. He also explained that projections for the rest of the year do not look promising due to inflation’s slowing but persistent pressure on prices and wages. This makes it challenging for consumers to recover financially from these economic pressures affecting household budgets.