Argentina's retail sales slump deepens as SMEs face falling demand

Retail sales by Argentine small and medium enterprises fell in May, registering a 1.2% year‑on‑year decline and marking the 13th consecutive month of contraction. From January to May the sector accumulated a 3.1% drop, with consumer spending concentrating on essential goods while non‑essential items remain in negative territory. E‑commerce grew 15.2% year‑on‑year but is insufficient to offset the weakness of brick‑and‑mortar stores.

In Mercedes, local commerce leaders warned that “the sector is going through a very large drop in consumption,” citing rising fixed costs, store closures and a forced shift to digital platforms, alongside competition from unregulated social‑media sellers that threaten formal retailers and risk increasing labor informality. In Santa Fe, 54.7% of merchants reported higher turnover in May versus April, yet inflation of 32.4% over the past year erased most real gains; only 35.3% of shops managed to outpace inflation, while 41.2% fell short. About 45% of retailers now combine physical and online sales, but high rent burdens and persistent inflation remain key challenges. The majority of businesses expect conditions to improve within the next year.