Mendoza Economy

The drop in consumption extends closures and staff reductions in Mendoza

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Commerce, restaurants, winemaking and automotive-related businesses are adjusting after exhausting internal cost cuts. Cecitys acknowledges that no consolidated tally of closed establishments exists, while suspensions and workforce reductions are appearing across different sectors.

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The contraction of consumption began to transfer with greater intensity to employment in Mendoza, after more than a year in which numerous companies tried to sustain themselves with internal adjustments, lower expenses, and structural changes. The deterioration is no longer concentrated in a single activity: commerce, gastronomy, winemaking, and businesses linked to the automotive market are recording suspensions, staff reductions, or closures, although there is still no provincial figure that gathers all these movements.

Trade offers the most visible expression of the crisis due to its weight as a generator of formal and informal employment. Adrián Alín, president of Cecitys and member of Federación Económica de Mendoza, stated that companies postpone layoffs until other alternatives are exhausted: first they reduce expenses and try to maintain operations, and only afterwards do they make employment a variable to adjust. He also warned that financing has ceased to serve as a bridge because, without foreseeable future sales, taking on debt to cover salaries or bonuses loses viability.

The contraction reaches other sectors through different mechanisms. In winemaking, various wineries offered voluntary retirements or reduced their staff. In the automotive business, a business source confirmed that a dealership with operations in Mendoza and headquarters in San Juan cut 15% of its personnel at the San Juan location, due to the national drop in sales and demand below projections. This adjustment is part of the regional scenario, but it should not be recorded as a reduction carried out within Mendoza.

Gastronomy combines restaurant closures with establishments that reduce staff to adapt to lower-than-expected activity. In retail, Carrefour closed two Mendoza branches at the beginning of July; the company assured that jobs would be preserved, so with the available information, these closures do not equate to two new rounds of layoffs. Industry entrepreneurs link the shuttering to fewer customers, lower average transaction values, and demand that failed to recover.

Alín linked the weakness of the domestic market with the loss of purchasing power and the slowdown in construction, an activity that distributes income to stores, clothing, and other consumables. The contraction of that cycle reduces sales in sectors that do not directly depend on construction. Cecitys does not have statistics on the number of closed stores, but its internal meetings show that practically all sectors have already reported suspensions or have begun to consider that measure.

The absence of a consolidated record forces separating confirmed facts from a total magnitude still unknown. There are restaurants that closed, wineries that offered withdrawals, businesses with suspensions, two branches of Carrefour closed with declared continuity of employment, and an automotive adjustment carried out in San Juan. The business chambers state that they will continue to seek actions to sustain activity and demand government tools; meanwhile, the evolution of employment will depend on whether consumption allows stopping cuts that have already ceased to be exceptional.

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