The discourse between the government and the opposition regarding the erosion of purchasing power and subdued retail sales progressed into a new phase on Friday. A private report indicated that, although consumer spending in July experienced a 4.2% monthly increase, sales have not yet returned to the levels observed last year. Year-over-year, sales have decreased by 2.6% relative to July 2025, with a cumulative decline of 2.9% for 2026. The data originates from a survey carried out by the private consulting firm Scentia, which is among the limited number of firms that monitor consumer spending trends on a monthly basis. Only two sectors have demonstrated advancements relative to 2025. The pharmacy sector has experienced a modest increase of 0.2% during the first seven months of the year. The other is e-commerce, which experienced a notable 35.6% increase compared to the January–June period of the previous year.
E-commerce represents the most rapidly expanding segment of the retail industry. In July alone, there was a 40% year-over-year increase. A report released this week by the Argentine Chamber of E-Commerce estimated that purchase orders increased 21% year-on-year, while order volumes rose 22% in the first half of the year. This growth has prompted the Milei administration to consistently claim that the drop in retail sales stems from a change in consumer behaviour rather than a reduction in purchasing power. Several business leaders subscribe to this theory, with notable mention of Mercado Libre founder Marcos Galperín, who aligns with the president’s political and economic perspectives. The CACE itself, however, acknowledges that e-commerce’s impact on total commerce is still very small, clarifying that e-commerce in Argentina accounts for approximately 8% of total domestic demand. “Is that enough to turn demand around? No,” said Andrés Zaied. “We need much greater growth to be able to offset declines on the other side,” he added.
This stagnation is increasingly evident in public opinion polls and surveys. One of the indicators most closely monitored by the establishment is the Consumer Confidence Index compiled by Di Tella University. In August, it experienced a decline of 1.1% month-over-month, representing the second consecutive decrease after the significant 4.8% drop noted in July. With this adjustment, the index registered at 40.2 points, reflecting levels comparable to those observed in May. “It is only 1.5% above its recent low in April,” noted brokerage firm Portfolio Personal Inversores. They also noted that this figure is “very similar” to the level the ICC reached in September of last year following the local legislative elections in Buenos Aires Province, where Milei suffered a surprising defeat. Another point they emphasised was that perceptions of personal circumstances declined by 3.1% relative to the previous month, while the propensity to acquire durable goods and real estate decreased by 4%.
