The stores advance liquidations to mitigate the consumer crisis
Large posters announcing liquidations, 2×1 promotions, rebates for cash purchases or different payment options with credit cards. All part of the artillery with which the commercial sector tries to seduce customers, lately elusive to consumption due to the deterioration of their purchasing power.
A representative figure of the parate suffered by sales in almost all shopping centers (clothing, footwear, leather goods, etc.) was seen in the last week, when the INDEC announced the decline in economic activity (-7.5% year-on-year ). There it became evident that trade (wholesale, retail and repairs) led the contraction of the indicator in November, with a fall of 17% compared to the same period of 2017.
This negative variation for the sector was the strongest of the year and a constant throughout 2018, according to the statistics of the Chamber of the median Enterprise (CAME), which showed a drop of 6.9% per year, including the month of December. (-9.9%).
“In this last time, the sales come too complicated”, describes Eduardo Sirodsky, merchant of the leather goods sector, in the district of Once. Its trade invoiced, in nominal terms, 10% more than last year, account, but with inflation, high operating costs, and social charges, among others, had a significant loss of volume sold and income. “In December we had a slight upturn in the Fiestas that helped us breathe, but in January, we went back to the harsh reality,” he says.
In this category, of suitcases, umbrellas and backpacks, among other items, 70% of merchandise is imported, explains Sirodsky. “With which, as prices increased twice, we ended up selling half.” “We can not accumulate stock due to seasonal changes, which is why we had to advance the liquidations,” he said.
According to Fabian Castillo, owner of the Giuliano footwear chain and president of the Chamber of Commerce, Footwear, and Allied, “the situation in the sector is worrisome.” The shrinkage in the shoe stores was 14.8% in the last year and the profitability is decreasing, says this entrepreneur who defines himself as “4th generation SME”. “People have less money and do not prioritize footwear,” he admits.
One of the initiatives taken by the chamber was to ask AFIP to agree to a moratorium to pay taxes that take away oxygen from sales. Another was to negotiate with banks to get lower rates that would allow them to finance themselves. “You have to think about investing in the new season, it’s impossible to keep a stock if you do not get financed,” he says. On the other hand, today more than 70% of sales are by credit card and this operation involves higher costs for the merchant, “says Castillo.
According to CAME data, during 2018, toy stores, although they sold cheaper items, recorded average falls of 5.3%; clothing stores, had 6.8% shrinkage and textiles and bedding businesses, saw their sales decreased by 8.1%, on average, despite the great promotions they did.
In this recessive context there was no lack of closures. In the city of Buenos Aires, there was an 11.8% increase in the number of premises without activity -in sale, rent, closed or closed- in the main commercial areas, while in the city of La Plata It was 40%, according to a survey by the Argentine Chamber of Commerce (CAC).
“Today there are more and more chains that can pay expensive rents and then, they mark the price of the commercial area, which means that many small businesses have to close,” explained Castillo.