It’s evening in the City of Buenos Aires. Workers travel home from their offices, pausing in cafes for a cup of coffee and a medialuna. Across the world in New York City, people race into Starbucks before the evening commute. Coffee shops are an integral part of Porteño culture and one that marks the architecture of the City. In New York, coffee consumption feels necessary to feed the frenetic pace. Yet while the North American agglomeration has a reputation for being ostentatiously expensive (subway rides for US $2.75, a cocktail for US $15), thanks to inflation, a cup of coffee in the South American city costs the equivalent of the same amount in US dollars. Except in Buenos Aires, that amount of money is a significantly larger percentage of one’s salary.
An article today in La Nación today chose to compare Buenos Aires to Paris and Madrid and found that eating out or buying groceries at your local chino can be more expensive here than that in comparable stores in the two European cities. “From a fixed menu in a bar or restaurant, to the difference in price of the same bottle of wine (…) from a kilo of tomatoes to a small trip, in many cases, the threshold of prices [in Buenos Aires] seems out of control,” the article stated.
We decided to conduct a similar experiment comparing prices between the Porteño city and New York, relying on irrefutable data (i.e. forcing friends back home to hightail it to their nearest Starbucks/grocery store/etc.) to see how our city measures up.
In New York City, a humble iced coffee costs around US $3.50 and a large black coffee from a New York City Starbucks costs around US $2.45. Since no one really lingers in a Starbucks, there’s no tip or added service charge. A large cup of coffee at a Palermo cafe costs about AR $35, which is US $2.37. (No coffee to go, por favor). If you make AR $14,000 a month working in Buenos Aires, you would be spending .25 percent of that salary on this cup of coffee. If you make the legal monthly minimum wage of AR $6,060, you’d be spending around .57 percent of that salary.
If this seems ridiculous — which it is — it’s because the cost of food in Buenos Aires is quite expensive for its residents. Inflation in the City during the month of May was around 5 percent, according to census report from The City of Buenos Aires’ Department of Statistics and Census, which fell from April’s 6.5 percent high but is still enough to make the yearly average close to 40 percent. And as of this past June, Buenos Aires is also the most expensive Latin American city for foreigners.
Forget coffee — coffee is expensive and hardly a necessity, and besides, people living on a budget might choose to make instant coffee at home in lieu of purchasing a cup. So what about food? At a supermarket in Buenos Aires, a kilogram of tomatoes can cost around AR $40. For someone making minimum wage, this is about .66 percent of his or her salary.
Forget the supermarket — for olive oil and wine at least, you should go to your neighborhood chino for a better price. At least, that’s what Miguel Calvete, the President of the Chamber of Supermarkets Owned by Chinese Residents said this morning on Radio 10, explaining that: “For things like wine and olive oil, family businesses are able to have direct contact with distributors. This allows people in groups or coops, like chinos or bodegas, to have the advantage of special prices.”
Yet at The Bubble’s neighborhood chino on Gorriti and Fitz Roy in Palermo, the price of a kilogram of tomatoes hovered around AR $45 (a single, large-ish tomato cost AR $12 but it was beautiful so I still bought it), the price of olive oil ranged from AR $23 to AR $40, and the price of the cheapest bottle of wine was AR $33, though much of the selection was closer to the AR $70 mark. In the bargain grocery store chain Dia, the prices on olive oil and produce were marked as higher: a kilogram of tomatoes cost AR $57.99, and a similarly sized bottle of olive oil cost AR $72, while wine was around the same as in the chino and the same container of Amo mi Ser yogurt cost fewer pesos (AR $18.95 versus the AR $23 I paid at the chino). In comparison, a single tomato at the Jumbo supermarket in Las Cañitas costs AR $35.
To further understand the discrepancies between food-specific purchasing power, I turned to The Economist’s Big Mac Index: an informal manner of comparing purchasing power parity (PPP) between various countries. Since exchange rates should eventually equalize the price of an identical basket of goods, its logic goes, the Big Mac Index uses this metric (the price of one Big Mac) to compare food-specific data. A Big Mac in Argentina costs around US $2.36, which equals AR $33, with an exchange rate of 13.81. The average price of a Big Mac in the US was US $4.93, which showed that the Argentine peso is undervalued by 51.5 percent. In comparison, a Big Mac in Brazil is US $3.35, (13.0 Real), which means the currency is undervalued by a significantly lower 32 percent. Argentina’s purchasing power is significantly lower than it is in the United States, which means its inflation has decreased the amount of products and services (i.e. Big Macs) that can be bought with one unit of Argentine currency can buy.
So forget McDonalds, forget the chino, forget bargain grocery store chains like Dia, which, in the past two to three years have cropped up all over the City, and you’re left with the knowledge that Buenos Aires can, in fact, call itself “the Paris of the South” — at least when it comes to expensive food.