Key players from the country nextdoor

After Argentina had weathered the economic crisis well in 2011, producing GDP growth of around eight per cent, the situation looked quite different in 2012. While the economic output of South Ame­rica’s third-biggest economy did actually grow last year, the rates of increase were substantially lower. Moreover, the official figures are being questioned in the business world. According to INDEC, the statistical authority, GDP achieved growth of 1.9 per cent in 2012. At the same time the rate of inflation came to more than ten per cent. Other estimates paint a more pessimistic picture of the situation: they put the rate of inflation at around 25 per cent and GDP growth at below the official figure. The retail trade is proving to be stable only to a certain degree when faced with a background like this. INDEC figures do indeed show that the supermarkets increased their sales by 14.1 per cent last year. However, when it comes to such apparently high rates of increase, the high rate of inflation must always be taken into consideration as well. So in real terms sales of the wholesale and retail trade in the first nine months were as much as 0.8 per cent down. Inflation is also the reason for a flight into material assets, which in turn supports the demand for consumer durables. The construction industry had profited from this trend in preceding years through growth of nine per cent. But this figure also went down dramatically in 2012, though it still remains positive. Real incomes are growing only slowly in this situation. This means that the starting scenario for the home and garden market is not ideal. Nevertheless, in recent years the DIY retailers have managed appreciable increases in their sales results. The market is dominated by two big competitors from the neighbouring country of Chile, where they confront each other in reverse order of size: with a current total of 47 stores – following eight openings in 2012 – the Easy chain belonging to the Cencosud Group is the undisputed market leader in Argentina. Cencosud also operates nine other outlets under the Blaisten brand name. The presence of the Chilean Falabella Group is much lower-key, consisting as it now does in Argentina of seven Sodimac stores. It entered the market here in 2008. Not until this current year has Sodimac expanded beyond its existing locations in the Buenos Aires region and moved further inland with the opening of a store in Córdoba. Download: