Scissors effect: the middle-class adjustment with cuts in spending on health, clothing, outings, and even transportation

With two-speed consumption, sales disparities are accentuated in an Argentina currently divided between those who can't make ends meet and those who live "dollarized," Moiguer y Asociados explained.
While the stable dollar encourages travel abroad and the return of credit boosts the purchase of durable goods, real estate, and cars, everyday purchases continue to be impacted by rising fixed expenses such as utility rates, which impact family budgets, and by lower disposable income .
Consumer spending rebounded 3.1% year-over-year in July, returning to the upward trend it began in March and halted in June. However, so far in 2025, it has seen a modest recovery of 0.8% .
In this context of slowing inflation, but with wages not recovering their lost purchasing power, the middle class continued to adjust and made the cuts in daily consumption , although it did so less than at the start of 2024, when the effect of the devaluation was felt most strongly, experts agree.
Various surveys show cuts in at least 20 expenditures over the past year : from basics like food, healthcare, education, and clothing to recreational outings, with varying degrees of intensity depending on the item.
39% limited their purchases of clothing and accessories. Photo: Archive
In the last twelve months, according to Bain & Company , 48% restricted their food purchases , while 39% limited their clothing and accessories purchases , 20% reduced their transportation spending , and 19% reduced their electricity consumption .
Alejandro Perez de Rosso , partner at the firm and head of its Argentina office, explained that " we are facing a balanced consumer in an election year and a transition in the economic model that is bearing fruit more slowly than expected and with volatility."
“Some recovery of real wages and greater credit supply "They are driving categories like durable goods, while expectations about the exchange rate's rise are generating "dollarized" consumption like cars and travel. At the same time, the rise in spending outpacing income is leading people to look for alternatives in daily consumption : reducing quantities, eliminating certain items, switching to cheaper brands, buying on sale, and even making things themselves," he compared.
According to the report, 48% of respondents are in a negative mood , but 58% are optimistic about the country's economic situation over the next five years.
Ten percent cut back on meat, and 10 percent stopped buying top brands. Photo: Archive
For Management & Fit , the outlook is similar: 29% consider the current situation positive and 45% believe it will improve in the future .
According to the firm, although the number of consumers who changed their habits fell from 90% to 80% from May to July, the situation is widespread. "All sectors experienced some cutbacks," stated its executive director, Lara Goyburu , adding that 44% had difficulty covering their monthly expenses, although the number of those experiencing severe problems fell from 17.4% to 16.7% .
The report shows that 10% reduced their meat consumption, and another 10% stopped buying premium brands , opting for second-hand or supermarket products. Meanwhile, 7.3% delayed or stopped paying for some service . To a lesser extent, 3% cut back on healthcare and 1.1% on education .
Unnecessary spending was also reduced. According to Bain & Company, 22% reduced their consumption of personal care items and 13% reduced their consumption of beauty products .
Another area of cutbacks identified was indoor entertainment: 17% reduced spending on subscriptions or streaming services, and 28% reduced home deliveries .
Social life was also restricted. Alcohol consumption decreased by 21% , and visits to restaurants and cafes by 32% .
On this point, Kantar highlighted that 76% have decreased their frequency of eating out , a decline that is most pronounced in the lower segments of the pyramid, reaching 85% . The most notable finding is that 50% said they do so rarely per month. The main demotivator is the high price , accounting for 74% of opinions.
The favorite places for those who maintain this habit are casual restaurants ( 61% ), fast food restaurants ( 38% ), and coffee shops ( 29% ). “In a turbulent economy and with a more demanding public, brands must go beyond convenience and offer a different experience to strengthen customer relationships and win over new ones,” said Luciana Dellisanti , Client Lead for Kantar Argentina ’s Insights division.
In this regard, according to Management & Fit, 10% reduced meals outside the home . Also, 7% moderated cultural and recreational outings , and 8% postponed trips or getaways . In summary, it noted that 17% postponed non-essential purchases .
Clarin