Because of inflation, primary consumption is the priority

Because of inflation, primary consumption is the priority

High inflation has caused consumers to become more cautious about their income when they go to the supermarket, as they prioritize spending on drinks and groceries and leave aside the purchase of electronic devices.

According to an analysis by information company Nielsen IQ, the section of self-service stores in Mexico that grew the most was beverages, with an annual rebound of 21.4 percent.

It was followed by the perishables and groceries division with a growth of 13.2% and 13.6%, respectively.

In contrast, sales in the electronics division in the first half of 2022 suffered a 21.3% annual rate decline, making it the lowest-grossing component of the first half of the year.

“The consumer prioritizes essential products,” said Ricardo Torres, Mexico director of retail services for Nielsen IQ. “He is facing very high inflation and it is having an impact on his income.”

In June, inflation in Mexico continued to accelerate and reached an annual rate of 7.99%, its highest level in 21 years, according to data from the National Institute of Statistics and Geography (Inegi).

Sales of the entire self-service segment overall grew 11.7% at an annual rate in the first half, although Torres explained that this was due to the increase the chains applied to the prices of their products.

For second-quarter 2022 results, he said, chains like Chedraui, La Comer, Soriana and Walmart de México will come under pressure on two fronts: increased supply costs due to inflation, as well as impacts. of disruptions in supply chains.

By products, the fast food channel offered by some chains was the most-growing channel in the first half, with an 89.9% increase in sales, according to Nielsen IQ.

In second place were edible oils, which grew by 33.2%. snacks 27.2%; Soft drinks 23.8% as well as beer, whose sales rose 23.8%.

Sales of fruits and vegetables also saw significant growth, increasing by 13.3% and 11.5%, respectively.

less technology

Conversely, the hardest hit products in the first half of the year were computers and video games, with sales down 65.7%; Televisions, -20.4%; Video devices (DVD players and cameras) -12.9 percent.

The specialist also attributed the decline in sales of electronic devices in self-service chains to the emergence of e-commerce in Mexico, the channel through which more and more Mexicans choose to acquire technological devices.

Other products that also had lower sales included powdered milk, which was down 10.1%, as well as processed beans and sugar, which were down 8.5 and 5.9%, respectively, according to figures obtained using the Total Store Read tool, which allows for measurement. All sales of the self-service sector at the national level

“(Prioritizing primary consumption) is a trend that we see at least for the remainder of this year and the beginning of the next, because (…) the (high) inflation levels that we bring, will remain throughout the year, in addition to the fact that the slowdown in the national economy In the event of a recession in the US, consumer spending will continue to be constrained.”

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