As the minister of economy, Luis Caputo once again took to social media to promote a retail chain’s price reductions in supermarkets. Jumbo, a popular supermarket chain, announced that it would be reducing prices on all its own-brand products for 60 days in response to government pressure and consumer complaints.
The government believes that the inflation index does not accurately reflect the decrease in prices due to measures such as quantity promotions and manufacturer resistance to lowering prices per unit. Consulting firms predict inflation rates between 11 and 13% for March, still higher than the government’s single-digit target.
Following meetings with supermarket executives, the government implemented tax reductions on imported products to encourage price reductions. Some supermarkets have responded by modifying their pricing strategies, offering discounts on individual units instead of promotion like 2×1 deals. These changes could potentially lower inflation rates by 0.4 to 0.8 percentage points in March.
Monitoring systems like the Electronic Price Advertising System show a decline in food inflation rates in March. Sales have dropped significantly, leading to discounts and promotions to boost consumer spending. Despite challenges in the industry, manufacturers continue to offer promotions in response to declining sales.
Overall, the government’s efforts to reduce inflation through price reductions in supermarkets have shown some positive results. While challenges remain, there is hope that these efforts will bring inflation rates down closer to official targets in the coming months.
