Retail: Due to low consumption, turnover in stores is increasing.

Consumption has yet to recover so far in 2025. While some sectors' performance is positive compared to 2024, last year's decline is still impacting commerce , which is also suffering from the decline in tourism. This situation is being experienced with concern not only in downtown Mendoza but also in supermarkets and other commercial spaces, which are already struggling to figure out what strategy to resort to in order to cope or increase sales . Adding to the recession is a complex mix of sharply rising costs—especially rates and rents—and a drop in consumption that is making it difficult to pass on these increases to prices.

Also included in the mix are purchases in Chile, the increase in informality, and purchasing power that hasn't recovered due to relatively balanced inflation. With the possibility of prices rising a bit more following the end of the currency controls and the rise of the official dollar, many merchants are doing the math and deciding to lower their shutters. Thus, if one walks through the main streets of the city, the panorama is varied. On the one hand, there are liquidations due to the closure of stores that have been in operation for many years. Here, several toy stores are closing, but there are also clothing and shoe stores. On the other hand, new stores are appearing in a variety of new ventures or changes in format.

In this regard, the real estate sector has observed a significant turnover in downtown locations, where closures are compounded by openings with low vacancy rates, at least on the main arteries in this area. However, the retail situation is worrying for the sector because there is no sign of recovery and many SMEs are on the brink. Santiago Laugero, president of the Economic Federation of Mendoza (FEM) , expressed that there is enormous concern not only in Greater Mendoza but also in the departments. He added that while sales began to pick up in September of last year, they are far from historical levels.

Furthermore, the business leader added that February saw a sharp slowdown in consumption , which went almost unnoticed in many businesses until the start of school. "The Chilean effect and illegal sales are situations that are increasingly affecting businesses," Laugero emphasized, adding that the trend shows that, despite some improvement, purchasing power has not yet recovered. "There are many businesses closing and a significant renegotiation of rental contracts, which have increased significantly, so this is a cost that has a significant impact on the overall structure of businesses ," added the FEM president.

Seasonal sales offer much higher discounts than in previous years.

Online, the president of the Mendoza Chamber of Commerce, Industry, and Services (Cecitys), Adrián Alín , noted that several historic establishments have closed in recent months. To name a few, a traditional clothing store in San Martín and Buenos Aires, a shoe store across from the Mendoza gallery, and a toy store in Catamarca and San Juan have already posted their liquidation or business sale signs. This association has organized to form an importing pool and jointly reduce costs, but they emphasized that the situation for most is dire.

"Right now, promotions and installments are more important than ever, but they're not always enough," Laugero emphasized. Regarding credit, there's a risk of overspending and having difficulties with cards, bank benefits, and virtual wallets. While this is a palliative, it's not enough in many cases. "The suspension of the BNA promotion has had a huge impact on sales," the FEM president emphasized, highlighting the importance of discounts and refunds.

While not the only one, one of the sectors most affected by the crisis is toy stores, where several have begun to close their doors. "Our sector is different from the rest because, in addition to the decline in consumption , the ways we play have changed," said Marcela Nicolini, owner of the Lollypop toy store and a representative of the area within Cecitys . Like Laugero, she commented that the boom in Mendoza residents crossing into Chile had a strong impact on their sales during the summer and that the high costs of tariffs and rent cannot be easily met. Along these lines, a toy store representative who preferred not to give his name stated that "Argentina is expensive in dollars," and that this favors not only purchases but also investments abroad.

Regarding the closure of businesses , real estate broker Eduardo Rosta of the consulting firm that bears his name said he has been following the issue for over a year. "In the downtown area, businesses are closing because either they don't make the cut or they move to peripheral businesses within street centers," he explained. He added that this situation is complemented by another trend: when someone leaves, another tenant quickly comes in with "new projects and a different approach." In other words, empty spaces aren't seen on the main thoroughfares of the downtown area; something that can occur on slightly more distant streets like San Juan, Alem, and others.

Commerce - Downtown Mendoza

Along the same lines, Estanislao Puelles, also a real estate broker , emphasized that there is little vacancy in commercial spaces located in the "prime zones." "Demand is sustained and supply is low," Puelles commented, attributing this to rising rents and the resulting improvement in profitability for landlords in dollars. Beyond this phenomenon, the specialist added that a phenomenon not seen in a long time is currently taking place. Many companies have gone out and purchased commercial spaces in a sort of strong investment. "Investing a few million dollars in a commercial space was something that hadn't been seen since at least 2010," Puelles commented.

Regarding the future, Nicollini expressed that it's difficult to make projections and that SMEs are trying to cope day by day. "We believe this has to improve little by little, but you never know when it will happen," the entrepreneur added. She added that the toy sector, in particular, has many opportunities due to the intrinsic value of physical play. The Chamber has been working for two years to raise awareness among families about returning to this type of activity. On a day-to-day basis, every little counts, and we'll have to see how the situation plays out in terms of prices.