In Mexico the beginning of the year price hike is known as the cuesta de enero, and as in recent years, it began in earnest in December as prices for most everything rose in the lead-up to holiday fiestas. While there are now some great deals on clothes and some consumer goods (much of which are imported from China) at department stores, prices of the daily necessities of life — food, water, gasoline, LP gas, electricity, cigarretts, beer and soda pop — climb steadily.
This newspaper reported the annual inflation (December 2010 to December 2011) at 3.82 percent in last week’s financial indicators. The University of Guadalajara (UdeG) disputes that figure reported by Mexico’s central bank, at least locally. Last week the state’s largest higher learning institution reported that inflation for the Guadalajara metro area was 8.6 percent year on year. And prices for basic goods and services are expected to continue to rise markedly though June, according to the UdeG’s director of the Economic Theory Investigation Center, Hector Luis del Toro Chavez. He blamed part of the problem on the devaluation of the peso in recent months, but also on hikes in government controlled products such as electricity, gas and gasoline and the drought that is affecting large areas of the country’s central and northern agricultural heartland. Prices of beef, pork, chicken, eggs and grains will increase markedly as the effects of the drought continue to hamper supply, according to Cesar de Anda Molina, vice president of the International Egg Commision.
The UdeG’s monthly basic basket of 121 goods for a small family is now at 5,933.74 pesos, which requires a salary of 3.4 minimum wages to purchase. And if services are included, the prices goes up to 14,000 pesos, or eight minimum wages.
Approximately 47 percent of the Guadalajara metro zone’s 4.5 million residents earn a salary of less than three minimum wages. That means more family members must work to help pay for the basic goods needed. Del Toro said that the monthly minimum salary is now at 1,743 pesos, but lost eight percent of it’s earning power (138 pesos) due to inflation. Of the 121 goods in the market basket, 109 saw price increases over the last year — 50 products had price increases above 8.6 percent and 59 products below that threshold.
The Reporter regularly shops at Mercado Abastos — a 60-hectare strip of hundreds of wholesalers and retailers to save money, especially on meats, fruits and vegetables. Any small restaurant owner knows they can get better prices at Abastos than at a supermarket, even if they are only purchasing a couple of kilos of an item. And prices drop dramatically on ten to 50 kilo purchases. Nonetheless, many middle-class families have stopped shopping there due to the ease of shopping at an increasing number of big box stores now sprinkled throughout the metro area.
Abastos’ shop owner’s union says sales are down 20 percent this past year over 2010. Much of the reduction comes from the opening of new regional markets — both in Jalisco and neighboring states — thus reducing sales to outlying areas. But the union says that their normal retail customers (Guadalajara housewives) just don’t have the increase in their weekly budget to buy as much as before.
Abastos has implemented a special discount area on Calle 15 each Sunday, where prices are as much as 50 percent lower than at the big box supermarkets. Dozens of vendors are there until 3 p.m.
The retail section located next to the large parking garage at Abastos will have most of the items you are looking for and probably fresher cheese, produce, fish and meat than the supermarket, although maybe not all the brands you want. If you buy in bulk — gallon jugs or number 10 cans — the savings are impressive.