Why are footwear increasing in Argentina?

According to INDEC (the official department that puts together and publishes the Retail Consumer Price list) appraisals -IPC in Spanish- together with monthly variations, the footwear item registered last September an interannual increase -as compared to September 2019- of 53 %, topping the 36.5 % average for other basic family expenses.

Among the main reasons that shoemakers invoke to justify the price increase are:

• The difficulties to produce due to the effects of the pandemic: fewer personnel, mobility restrictions, affected logistics and services, etc.
• The reduction in the general supply of footwear, with fewer national and imported products.
• The indispensable recovery of prices, given the delays registered in the last year, as consequences of devaluations and inflation.
• Generalized increases in the prices of materials, components and supplies.
• Lack of imported supplies due to inconveniences in import operations and shortage of foreign currency.
• The strong tension generated by maintaining a price policy with the wide gap between the price of the official and marginal dollar (October 2020 = $ 80 and $ 180, respectively).

Footwear manufacturers consider that rising prices at a time when consumption is still depressed, is inevitable in current economic conditions.

Part of the solution is envisioned in greater productivity, the recovery of the purchasing power of consumers, and fundamentally in the economic policies implemented by the government to achieve definitive stability.

Argentine industrialists value official aid through the plans ATP -salaries in charge of the State - and the renewal of the AHORA 12 financing systems -purchases in installments- that facilitate production and consumption.

Expectations increase with the gradual opening of the commercial circuit and the approach of the end of the year, a period where purchases usually increase.

FOOTWEAR - Indicative Average Prices for Consumers - October 2020

Source: SERMA. Own surveys.

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