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due to high electricity rates and paralysis of sales, they fear a wave of closures since March

The blender plan and chainsaw, that the government of Javier Milei implemented at a practically unprecedented speed, it dyed the social and real economy indicators an intense red color. He recessive scenario It is a palpable reality in the pockets, on the street, in the factories and in the shops. And it promises to get worse. Traders are on alert for March, a month that promises to be a turning point. On the one hand, they warn about the possibility that the drop in sales is deepened based on the impact of the tariffs and the start of classes on the purchasing power of families. On the other hand, they propose that the sharp increase in electricity will have a determining impact on costs. So, They fear there will be a wave of closures of premises, especially those with small surfaces.

“After March, we are going to make an evaluation of how many businesses are left standing,” he told Ámbito Fernando Savore, first vice president of the Federation of Storekeepers of the Province of Buenos Aires (FABA). In the sector, they foresee an explosive cocktail: a sharp rise in costs and a greater decline in turnover.

One of the great uncertainties today among merchants from different sectors is what amount they will receive in the next electricity bill, which the Government decided to increase this month and will begin to be reflected in the ballots that arrive from March. It happens that the steepest rise will be suffered by businesses, above that which will be experienced by homes and industries. According to calculations by the consulting firm Economía y Energía, based on the tariff tables published by the National Electricity Regulatory Entity (ENRE), The smallest businesses will see increases of up to 389% and the largest, close to 300% since they will lose all subsidies and will start paying the full rate.

“40% of our business runs on electricity, with all the refrigerated products we have. We have to wait to see what surprise the new electricity bill brings us, because hits our operating costs”says Savore.

Sales plummeting

This impact will occur in a context of sales collapse, which crosses practically all sectors. As he told Ambit, the consulting firm Scentia measured a drop of 3.8% year-on-year in January, which in supermarkets reached 8.3%, affected by the closure of the Fair Prices program, and anticipated that its preliminary estimates point to a decline of around 9% for February.

An Ámbito survey among retail entrepreneurs showed an even greater deterioration. A representative of one of the great supermarket chains that operates in the country stated that its sales fall at a rate of 16% year-on-year and that the retraction in food, the most sensitive item, is very significant. In one of its competitors, they talk about a 15% decrease in January.


Businesses: the fall in consumption affects almost all sectors.


In the chamber that brings together the main players in the sector, they say that the fall continues at those levels so far in February. “The level of tickets is maintained (that is, the number of visits to the branches), but the units sold in each ticket drop between 15% and 20%. “This shows that there is not so much displacement to other channels, but rather that there is a sharp drop in consumption in general,” one of the sources consulted told Ámbito. And he added: “The picture is very bad because There is not the slightest hint that this could rebound. “The impact of the rate increase will further liquefy the purchasing capacity of families.”

The grocers Buenos Aires residents reveal a similar situation. From FABA, they told this medium that in the first fortnight of January there was a decrease in sales of around 15% and it deepened in the second fortnight to reach between 20% and 25%. “In February it continues the same,” they point out.

The paralysis of sales is decisive in the recessive situation. He consumption It represents about two thirds of the Argentine GDP. In fact, this Wednesday the INDEC published the first economic activity data of the Milei era: in December, fell 4.5% year-on-year and 3.1% against November. For January, all the anticipated sector indicators indicated a worsening of the deterioration.

The collapse in consumption is a reflection of the liquidation of salaries and pensions product of the inflationary flash that was unleashed after the December devaluation (the most abrupt since the exit of convertibility) and the null income policy deployed by the Government, in what seems to be the bet that inflation will end up slackening at some point. moment from the recessive anchor.

In this context, some merchants are preparing for a further decline in sales over the next month. In March, the impact of rates, transportation and the start of classes will be added to the initial deterioration in the purchasing power of workers and retirees. With this combo of factors, in the different entities that group them Fears are growing that there will be massive business closures between March and April. Especially in small neighborhood stores..

Savore explained that a medium-sized business, of about 80 or 90 m2, may be able to resist a little more, but there are smaller businesses of around 40 m2, with few shelves or gondolas, that are more exposed: “Those are the ones that are in danger in this first stage.”

The truth is that there are already several examples of what could become widespread in the coming months. This is the case of Matías Iborra, who this week was forced to announce the definitive closure of his Esquina Libertad warehouse, located in La Plata, due to the impossibility of facing the “constant” increases in merchandise prices, the increases in rates and the cost of renewal of the rental of the premises. “I looked for all possible alternatives. But in December sales began to fall precipitously. This month I have to renew the rental contract and it comes with a 600% increase, with a review after three months. And the electricity went to more than $200,000,” he said in dialogue with Radio 10.

Consumption, businesses and SMEs in PBA

These problems were the focus of discussion last Monday at a meeting organized by the Buenos Aires government, which brought together Axel Kicillof with representatives of SMEs and supermarkets within the framework of the relaunch of the Buenos Aires Production program. There was talk of the collapse in consumption and the governor proposed working on a provincial gondola law, after Milei repealed the national regulations through the mega DNU 70/2023.

Present were representatives of wholesale distributors and supermarkets (CADAM) and supermarkets (CAS), the Provincial Chamber of Supermarkets and Self-Services (CAPSA), the Argentine Federation of Supermarkets and Self-Services (FASA), FABA, the large supermarket chains ( ASU) and SME producers, among others. In addition to Kicillof, the ministers of Production, Augusto Costa, and Agrarian Development, Javier Rodríguez, and the president of Banco Provincia, Juan Cuattromo, participated for the provincial government.

The common denominator of the meeting was concern about the collapse in sales, the depth of the recession and alarm regarding what may happen in the coming months. In this scenario, Kicillof confirmed the continuity of the Buenos Aires Production program, which seeks to give SMEs more access to the shelves, as a political signal that his management will seek to remain active in an area marked by total deregulation on a national scale. He also confirmed that the DNI Account discount plan (Bapro’s virtual wallet) will remain in force, a tool that has 9 million users and that small merchants consider vital to mitigate the deterioration of billing.


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