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Shopping baskets shrink as inflation deepens

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A new study shows that fewer Kenyans are now shopping in bulk as inflation deepens. Fredrick Onyango

Rising inflation is changing the way Kenyans shop at supermarkets as consumers increasingly turn to weekly instead of the once-a-month bulk purchases.

The new trend has also cut the average monthly spend, a new survey shows.

Research firm Consumer Insight shows that the number of people going for bulk monthly shopping has reduced to 19 per cent this year compared to 29 per cent last year, making supermarkets such as Uchumi, Nakumatt and Tuskys to rely more on customer numbers to drive sales.

At least 63 per cent of shoppers make weekly purchases, up from 46 per cent last year, with daily trips having reduced to 15 per cent from 25 in the period under review.

“Customers who do not have enough money to do bulk shopping break up their lists and only buy on a need-to-use basis, keeping the bills at an average of Sh1,000 and below,” said Nduku Mulwa, the Director of Research at Consumer Insight

“In a shift likely affect to marketing strategies , the frequency of shopping has shifted from a monthly to a weekly affair,” she added.

The supermarkets are already shifting to weekly and mid-month promotions instead of end month offers to grow sales as shopping baskets get smaller.

“A reduced disposable income has caused economic insecurities amongst shoppers and this has forced many of them to make changes in both the amount of products they buy and the frequency with which they do it,” Uchumi Supermarkets CEO Jonathan Ciano said.

“There is an increased propensity to save for another day and buy just what is necessary for big shopping moments can be created any time and retailers do not have to wait for the end of month to influence shoppers,” Mr Ciano added.

Runaway inflation has eroded purchasing power and seen the cost of living go up 15.53 per cent in July up from 5.54 per cent on expensive food and energy costs, including electricity and fuel.

This has seen low income earners cut back on the items they consume on a monthly basis as they apportion the bulk of their income to basic items such as food and transport.

This group has been the hardest hit by the rising commodity prices with their inflation at 16 per cent last month—higher than the national average. Kenya’s emerging middle class and the best paid workers seem to be facing less pressure from the soaring food and fuel prices as their monthly inflation stood at 10.15 per cent and 11.67 per cent respectively.

High incomes

High income earners have the luxury to cut back on non-essential goods and services when prices jump to cushion them from soaring inflation.

Their broad basket of goods and services and fat incomes give them room to absorb price shocks, with the additional cost constituting a lower proportion compared to the budgets for the lower income classes.

Nakumatt Supermarket Managing Director Atul Shah said the change in buying habits could also be attributed to the proximity of retail outlets to consumers and their convenience.

The Consumer Insight survey reckons that the bulk of the shopping is being done by men—a pointer that family heads are taking control of household budgets in an attempt to control the purse strings.

The study also shows that a significant chunk of the shopping at 61 per cent is being done by those aged between 20 and 29—a population that is made up of consumers who have just completed school or are have just entered the job marker.
Analysts at CFC Stanbic reckon that the retailers should deepen their recent foray into the kadogo economy —the sale of consumer goods in smaller packages—besides goods that appeal to individuals starting families such as fridges, baby products and electronic gadgets.

“Surprisingly, the latest REJA Study (Consumer Insight survey) reveals that, at 53 per cent, there are more male than female shoppers and 77 per cent of them tend to shop alone,” says Anne Kamau, the managing director of Gap Marketing—a consultancy firm.

The shopping trend poll was done on June and it interviewed 1, 200 shoppers spread across 328 retail outlets in Nairobi, Mombasa, Kisumu, Machakos, Nyeri, Nakuru and Eldoret.

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