THE DEMAND for household consumption is gradually improving, as shown by the latest Bancolombia report. Indeed, during the week of July 20 to 26, consumption grew for the fifth consecutive week, with a nominal increase of 2.5% compared to 2022. However, inflation is the main driver of said performance. In line with this, the balance for July indicates an annual nominal growth of 3% and a decrease in real terms of 8%.
The report indicates that “after what would appear to be a maximum drop in March (-13%), consumption levels would begin to improve progressively, and we would see a slightly better outlook for consumption in the second semester. However, it is important to keep in mind the great challenges that remain latent in terms of interest rates, household indebtedness, inflation, among others”.
They point out that the average ticket (or average value of transactions) is a good indicator to understand the effects of inflation on the purchasing power of households. A significant increase in this indicator could be due to an increase in prices, which negatively affects the purchasing power of consumers.
In July, the measurement was 4% higher than the level of the same period last year; however, when price levels are taken into account, it is observed that the purchasing power of households has been reduced to the extent that the average ticket contracted 7% per year in real terms.
Behavior
During the week of reference, the behavior of consumption continues to reflect a negative trend in all the regions analysed. Once again, the East and the Caribbean were the ones with the greatest falls: -15% and -13%, respectively. Meanwhile, Occidente and Antioquia presented the least accentuated contractions.
The result at the city level was quite similar, with widespread contractions in real terms in consumption levels, as a result of high price levels and financing costs. Medellín and Bogotá presented the least setbacks in the reference week, and Neiva, Cúcuta and Ibagué the worst performance.
In the week of July 20-26, the best performing categories were insurance and financial services and entertainment, posting annual growth of 59.5% and 3.4%, respectively. In the case of insurance and financial services, the high growth is due to the payment of taxes, including vehicle taxes, for some regions of the country.
Sectors
On the other hand, the sales data by sector continue to show a significant drop in the share of the department store category, which had the greatest decline, going from 18.9% in 2022 to 17.9% this year. as well as in mobility and vehicles, an item that again lost prominence and whose share fell 3.5 points. The foregoing is mainly guided by inflation levels and double-digit interest rates that persist and continue to affect household consumption habits. Meanwhile, restaurants and health increased their participation compared to last year.
Performance
The purpose of this analysis is to provide information on the behavior of consumption during the days of the current year. The score varies between 0 and 10, where 0 corresponds to the worst performance and 10 to the best. So far this year, it can be seen that the day with the best performance was Tuesday, July 4, while the lowest records occurred on Sunday, January 1, and Friday, April 7.
On the other hand, regarding July, the day with the highest level of purchases was Tuesday the 4th, while the lowest record was reported on Monday the 3rd.