Mexican consumers are already beginning to adjust their portfolios. Between the price hikes and the economic outlook that is subject to the evolution of COVID-19, again there are some categories that are not considered essential when filling the cart.
As happened at the beginning of the pandemic, in 2020, Mexicans plan to reduce their spending on electronics and technology by 40%, 39% on beauty products, 34% on clothing and footwear and 17% in the food and beverage category, according to data from the analysis of Consumer Purposes for 2022, carried out by the consulting firm Psyma.
These are not the only changes. Buyers plan to increase their budgets in categories such as personal hygiene, by 32%, and cleaning products by 29%. During the beginning of the confinement, products in these categories, such as hand soap and chlorine, were among the most sought after since they were considered within the articles to sanitize and prevent coronavirus infections.
Simeon Pickers, general director of Psyma Latina, comments that inflation in Mexico, and in the world, is one of the factors that exerts pressure on consumption levels, in a panorama where logistics problems continue, which have hardened with the pandemic and that have caused some companies to report shortages in their stocks.
In Mexico, the price increase was 7.36% at an annual rate last December, its highest level since October 2001, according to data from the National Institute of Statistics and Geography (Inegi). Buyers already foresee an adjustment to their budgets and this less optimism led the Consumer Confidence Indicator (CCI) to register a monthly decrease of 1.5 points.
“The behavior of consumers is always influenced and we are facing a panorama of uncertainty, insecurity, although people are already learning to live with the pandemic. What companies can do is evaluate whether they are going to raise their prices or not, in order to stay competitive in the market, ”says Pickers.
What about premium brands?
For specialists, the changes also have some opportunities for brands. In the first place, because buyers seek to carry in their carts those that communicate safety, confidence and comfort, characteristics that allow them to maintain their position in the market and, according to Pickers, are the most successful in times of uncertainty.
Although with the rise in prices, buyers seek to replace brands, some maintain their strategies to stay within the consumer basket, responding to new purchasing needs, some learned from confinement.
Yanira Reyes, Analytics Leader at Nielsen IQ, comments that Mexican consumers favor the low price points of premium brands, meaning that in the most difficult times for their pockets they look for options to integrate smaller sizes, marketed to their portfolios. Reasonable prices, Meanwhile, new features are being deployed to respond to buyers.
“Brands that want to face these conditions will have to bet on differentiation. Today more than ever we have a record that those who took some specific action to help during the pandemic were favored by consumers. And we also have growth in healthy and organic products, this is a value that we brought from 2020 and that will continue in the future ”, he explains.
