Chilean retailers and airlines have experienced a significant uptick in fourth-quarter earnings, largely thanks to Argentine President Javier Milei’s economic policies.
As the overvalued peso motivates Argentine consumers to flock to Chile for shopping, businesses like Falabella SA, Cencosud SA, and Latam Airlines Group SA have reported enhanced sales figures.
With more than 2 million Argentines traveling to Chile in the past year, the surge in cross-border shopping has revitalized revenue streams for companies relying on tourism.
In January alone, over 500,000 Argentines made their way across the Andes, marking a substantial increase from the previous year.
Cencosud’s chief sustainability officer, Marisol Fernández, noted that “thirty percent of total revenue is coming from tourism in the shopping centres that border Argentina,” highlighting the substantial impact of this trend on local businesses.
Falabella’s retail unit saw same-store sales leap 21% in the fourth quarter from the year earlier on increased purchases by tourists. Over the same period, Cencosud’s Chilean operations posted a 5.4% increase in revenue and Latam Airlines’ revenue gained 4.4%.
Shares have tracked sales higher. Falabella’s stock leaped 58% in the last 12 months, while Cencosud rose 50% and Latam Airlines climbed 30%.
Retailer Ripley, which reports earnings on Wednesday, could also see similar trends in revenue.
The Argentine peso has weakened just over 20% in both the formal and so-called blue chip markets over the past 12 months, way below the 84% jump in consumer prices. At the same time, the Milei administration has made it easier to spend money abroad, removing some of the restrictions on credit card expenses in foreign currencies.