ARGENTINA'S EXPERT SHOPPERS.

During the days when Argentinas currency (the peso) was on par with the U.S. dollar, Argentine consumers invested little time in comparison shopping, and retailers had little motivation to discount their products. Over the past two years, Argentines have become much more knowledgeable of what they are purchasing and are willing to go out of their way to buy products at a discount.

With real household income still less than half of what it was in 2001, impulse purchases have dropped to near zero. The great majority of households have clearly defined their items of basic necessity and are buying little else. Rather than purchase from traditional retailers, consumers are buying from wholesalers wherever possible. During 2003, the number of consumers making purchases from wholesale outlets was double the level recorded during 2002. In many cases, several households in a neighborhood combine their resources to meet the minimum purchase requirements of wholesalers.

Rather than making all of their purchases under one roof at a hypermarket, most Argentines frequent three or four establishments in order to find the best deal on specific products. Discount stores have emerged as the biggest beneficiaries of shifting purchasing patterns. The market share of discount stores increased by 50 percent in 2003 and double-digit sales growth should continue through 2004 and 2005. In most product categories, low-priced local products have achieved rapid sales growth at a time when imported brands are struggling to recover market share after sales plummeted in 2002.