Cost of living in Argentina for foreigners improving?

[LuckyLuke]

I think reality is biting and Argentine businesses are realising they need to lower their margins to sell more, or risk dying - finally they are learning the word "compete".

This is more what I think is happening.

 

[Ronnie Hotdogs]

To be fair my expensas have come down a fair bit in GBP as has my Prepago.
Eating out and shopping still expensive.

 

[desde_Holanda]

Is not in the genes, local merchants, won't lower prices/margins to "compete" Only will try promotions, 12 payments, 3x2, 70% discount on second unit, etc. Imports from Mercosur are currently priced perhaps 10 % below local prices, with higher margins.

It will play out like during Menem's period a sudden drop..!

I have read this kind of observation a couple of times, from different people. Can't be a matter of genes ofc, probably you mean culture / history.
It's difficult to get a feeling for this. I mean, as a local merchant you look at your sales, your costs, your margins. If margins are sufficiently high and sales is too low to cover costs, I can't think of another way forward than lower prices. Can't be that all Argentine entrepeneurs are that stupid??

 

[Che1990]

Can't be that all Argentine entrepeneurs are that stupid??

They are.

It’s a combination of too much pride, greed, a lack of astuteness and the same poor work ethic you see in the restaurants and shops here.

They don’t give a fuck about selling or working. All they care about is working as little as possible for as much as possible. All short term thinking.

If you look on MercadoLibre or Rappi for a particular product, you’ll find huge price differences. A packet of Juan Valdez coffee is anywhere from 20,000 to 40,000 pesos.

Doesn’t happen anywhere else - businesses check what their competitors are doing all the time, and price match and price beat.

Here they don’t even bother.

There are also lots of monopolies, regulation and protectionism that breeds these practices.

A good example are the estate agents, they are horrific. Scum of the earth. They don’t work hard and charge ridiculous commissions.

But they get away with it because of the regulations that protect them. You have to be licensed to be an estate agent, and be a member of the CUCIIBA chamber/union where they all agree to charge % commission. Nothing you can do about it. It’s against their code to charge less commission. Corrupt laws protecting them.

A few months ago there was a video on TikTok/IG about a furniture business that was doing really well because they had good prices.

They shared a video from when they started out 2 years earlier about all the hate they received from other furniture companies because of their low pricing, comments like “I wouldn’t get out of bed for that margin”, “you’ll put us all out of business”

And also, when Uber arrived. Everywhere else, normal taxis have to lower their prices, innovate new services, and improve their offering. Básica fucking capitalism.

Here what did they do? The taxi drivers hunted down the uber drivers, attacked them, threw stones at them, and damaged their cars like cavemen.

And now lots of businesses are complaining about the imports coming in, as they finally have to compete and lower their prices.

That’s the mentality of many -not all- Argentine business people.

It’s why the country is so fucked, too. It’s not just the politics, it’s society.

 

[Rich One]

I have read this kind of observation a couple of times, from different people. Can't be a matter of genes ofc, probably you mean culture / history.
It's difficult to get a feeling for this. I mean, as a local merchant you look at your sales, your costs, your margins. If margins are sufficiently high and sales is too low to cover costs, I can't think of another way forward than lower prices. Can't be that all Argentine entrepeneurs are that stupid??

Here when the local butcher sells less he increases the prices.???

 

[Caribbean Cool]

Costs are down for those of us who receive U.S. dollars. Nominal costs are anything but down.

 

[RichardAlem]

I paid $23,000 for a burger and fries last week ($18).

That what you'll pay in Los Angeles where minimum wage is $16.50.

That means it takes 1.1 hours of labor to buy a burger in LA.

My cuñado here in Neuquen makes $14,000 an hour, so 1.6 hours to buy a burger. Sounds about the same right? Except that he's a school teacher with 25 years seniority making above average wages. You can forget minimum wage.

Long story short, prices are still absurd both in dollars and pesos.

Recently I paid 32,000 for a cheeseburger and diet Coke at Kansas by Hipódromo. And, the place was packed with a line to be seated.

I'd still rather be here than in the United States.

 

[RichardAlem]

They are.

It’s a combination of too much pride, greed, a lack of astuteness and the same poor work ethic you see in the restaurants and shops here.

They don’t give a fuck about selling or working. All they care about is working as little as possible for as much as possible. All short term thinking.

If you look on MercadoLibre or Rappi for a particular product, you’ll find huge price differences. A packet of Juan Valdez coffee is anywhere from 20,000 to 40,000 pesos.

Doesn’t happen anywhere else - businesses check what their competitors are doing all the time, and price match and price beat.

Here they don’t even bother.

There are also lots of monopolies, regulation and protectionism that breeds these practices.

A good example are the estate agents, they are horrific. Scum of the earth. They don’t work hard and charge ridiculous commissions.

But they get away with it because of the regulations that protect them. You have to be licensed to be an estate agent, and be a member of the CUCIIBA chamber/union where they all agree to charge % commission. Nothing you can do about it. It’s against their code to charge less commission. Corrupt laws protecting them.

A few months ago there was a video on TikTok/IG about a furniture business that was doing really well because they had good prices.

They shared a video from when they started out 2 years earlier about all the hate they received from other furniture companies because of their low pricing, comments like “I wouldn’t get out of bed for that margin”, “you’ll put us all out of business”

And also, when Uber arrived. Everywhere else, normal taxis have to lower their prices, innovate new services, and improve their offering. Básica fucking capitalism.

Here what did they do? The taxi drivers hunted down the uber drivers, attacked them, threw stones at them, and damaged their cars like cavemen.

And now lots of businesses are complaining about the imports coming in, as they finally have to compete and lower their prices.

That’s the mentality of many -not all- Argentine business people.

It’s why the country is so fucked, too. It’s not just the politics, it’s society.

Well said. Exactly.

I have no sympathy for people who are corrupt. I live in one of the so-called 'best' neighborhoods but after shaking hands with someone here, I check my fingers to see if a ring is missing.

Just farsantes and estéticas. No thanks.

 

[Warm_breeze]

They are.

It’s a combination of too much pride, greed, a lack of astuteness and the same poor work ethic you see in the restaurants and shops here.

They don’t give a fuck about selling or working. All they care about is working as little as possible for as much as possible. All short term thinking.

If you look on MercadoLibre or Rappi for a particular product, you’ll find huge price differences. A packet of Juan Valdez coffee is anywhere from 20,000 to 40,000 pesos.

Doesn’t happen anywhere else - businesses check what their competitors are doing all the time, and price match and price beat.

Here they don’t even bother.

There are also lots of monopolies, regulation and protectionism that breeds these practices.

A good example are the estate agents, they are horrific. Scum of the earth. They don’t work hard and charge ridiculous commissions.

But they get away with it because of the regulations that protect them. You have to be licensed to be an estate agent, and be a member of the CUCIIBA chamber/union where they all agree to charge % commission. Nothing you can do about it. It’s against their code to charge less commission. Corrupt laws protecting them.

A few months ago there was a video on TikTok/IG about a furniture business that was doing really well because they had good prices.

They shared a video from when they started out 2 years earlier about all the hate they received from other furniture companies because of their low pricing, comments like “I wouldn’t get out of bed for that margin”, “you’ll put us all out of business”

And also, when Uber arrived. Everywhere else, normal taxis have to lower their prices, innovate new services, and improve their offering. Básica fucking capitalism.

Here what did they do? The taxi drivers hunted down the uber drivers, attacked them, threw stones at them, and damaged their cars like cavemen.

And now lots of businesses are complaining about the imports coming in, as they finally have to compete and lower their prices.

That’s the mentality of many -not all- Argentine business people.

It’s why the country is so fucked, too. It’s not just the politics, it’s society.

Couldnt of said it better myself

 

[carride]

There are also lots of monopolies, regulation and protectionism that breeds these practices.

But they get away with it because of the regulations that protect them. You have to be licensed to be an estate agent, and be a member of the CUCIIBA chamber/union where they all agree to charge % commission. Nothing you can do about it. It’s against their code to charge less commission. Corrupt laws protecting them.

Those are monopolies and domestic protections that the libertarian leader has no plans to address. Those regulations protect the entrenched businesses who enabled his presidency. Decrees and laws set during the dictatorship of the 70s which still exist today for the same reason they did at that time.

As this recent opinion piece attempts to explain:

It was in this dark context, antithetical to the principles of an open society and contrary to the liberal tradition, that the creation of the so-called "real estate associations" was conceived. General Lanusse, through the decree that gave rise to Law 20,266, laid the regulatory foundations for these bureaucratic bodies, later reinforced by Law 25,028 in 1999. These originally flawed entities, with their purported mission of being "guardians of morality" and "masters of what is appropriate," proclaimed themselves the arbiters of what is right in the real estate industry, replicating almost verbatim the discourse of control and domination of the military of that era, and to this day they maintain the spirit of "monitor and punish."

El control de precios que mantiene cautiva a la industria inmobiliaria

El sistema de colegios inmobiliarios y la matrícula obligatoria, heredados de decretos de la dictadura y reforzados en democracia, mantienen trabado al mercado con controles de precios, burocracia y privilegios corporativos. Para muchos especialistas, liberar la competencia es clave para...

www-ambito-com.translate.goog

Though similar issues have existed in US for decades as well. Not laws, just old-fashion conspiracy and collusion. Only last year the Supreme Court ruled against the antitrust practices of the National Association of Realtors (NAR) and their terms of accessing the Multiple Listing Service (MLS). On paper this was supposed to lower commission costs for consumers, but reports are that not much has changed so far one year later.

https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement