Coronavirus (COVID-19): traditional supermarkets in Argentina facing toughest challenge in years

Date : 07 April 2020

Oliver Butterworth

Retail Analyst

Due to restrictions put in place due to COVID-19, kiosks (traditional convenience stores) and Chinese supermarkets (traditional mom-and-pop neighbourhood supermarkets) are facing their toughest challenge of recent years.

Government restrictions significantly impacting kiosks

Argentina’s mandatory social isolation decree, which was released on March 19, stated wholesalers, supermarkets and local retailers were exempt from quarantine, however this did not apply to kiosks. Despite most kiosks selling food, kiosks were said to not sell essential products and, in many cities, have had to close. Those which have continued to operate, are facing restrictive hours, that the government has put in place to reduce the number of people on the streets.

At this stage there is no economic support from the state. Some small businesses, who declare incomings under a certain threshold are receiving government support, but most kiosks do not meet the necessary criteria. As a result, some families are losing their only source of income. For many, closing is not an option and although many owners can afford to comply with preventative isolation measures to protect theirs and their family’s health, others are forced to remain open to survive.  

Kiosk owners also face issues travelling to and from their stores as they are lawfully required to issue official certificates when travelling and these aren’t being supplied to small merchants.

Issues with stock

Kiosk owners say they are losing 70-75% of their typical sales. Fewer customers and restrictive hours are one issue, but availability is also a major issue. Distributors are prioritising larger supermarkets, which is leaving small businesses out of stock. Many wholesalers have temporarily closed, and vendors are struggling to buy fresh fruit and vegetables.

Restrictions put in place due to the isolation decree have led to cigarettes, which account for a large share of kiosks’ turnover, not being manufactured, which is causing nationwide shortages.

More than 80 Chinese supermarkets closed

Two weeks prior to the start of quarantine, Argentina’s Chinese supermarkets had a peak in sales. However, since the start of quarantine, more than 80 have had to close due to stock shortages, whilst others have had to reduce their operating hours.

Miguel Ángel Calvete, leader of the Argentine Federation of Chinese Supermarkets, explains "There is no shortage, but there is a lack of stock. Deliveries by distributors and wholesalers, which before the virus were six or seven per day, are reduced to one per week”. As a result, some stores have been forced to operate without their greengrocer and butchers.

Some products have also increased in price, e.g. dairy. Calvete says this is due to a cascade effect in the production chain as no industry was prepared for the spike in consumption pre-isolation.

Adapting to offer delivery

To maintain sales, some store owners have adapted their proposition to offer a self-fulfilled delivery service. In most cases, orders are being made through WhatsApp and Facebook, but more advanced services, such as the Wabi app (powered by Coca-Cola), are being used to support kiosks and warehouses managing their own home deliveries.

For more on Coronavirus (COVID-19)

See our latest news and reports here.