Christmas of thin shopping, without gift hampers


A gift shop in Nairobi. Hard economic times have hit gifting during this festive season. PHOTO | DIANA NGILA | NMG

Selina Gacambi sees this year’s Christmas as the most uninspiring festive season ever in her professional life. The public relations consultant recalls past years with fondness and nostalgia.

Most of her clients would send hampers to her to crown their business partnership.

“Sometimes I would fill the backseat of my car with packages from different organisations. There would be chocolates, champagne, souvenirs and simple electronics,’’ she recounts.

This year, she was lucky to receive two hampers.

Her clients chose not to issue Christmas gifts at all this year, citing unstable business. It is the case with most Kenyan corporates.

When Jane Mueni boarded a Machakos-bound matatu to join her family for Christmas celebrations on December 24 last year, a two-kilogramme packet of fortified maize flour was retailing at Sh134, a two-litre cooking oil jar was Sh580, a one-kilogramme packet of sugar cost Sh127, a 400-gramme loaf of bread was Sh55 while a 13-kilogramme cooking gas cylinder went for Sh2,611.

The five basic items that cost Ms Mueni Sh3,507 just 12 months ago will this time round cost her Sh4,086 which represents a 16 per cent rise, yet her family will require other additional essential supplies to enjoy a truly merry Christmas.

Traditionally, the festive season has been a time for abundant – and sometimes extravagant – shopping among middle-class Kenyans.

The price upswing of most essential commodities in the last year has shrunk the Christmas basket, and middle-class Kenyans will have to fork out more to entertain their families this festive season.

On average, the cost of critical household goods has gone up by 45 per cent compared to this time last year.

Today, a two-kilo maize flour is Sh177, a two-litre cooking oil jar goes for Sh689 while a one-kilogramme packet of sugar has risen to Sh156.

A 400-gramme loaf of bread is priced at Sh60 and a 13-kilogramme cooking gas cylinder is now retailing at Sh3,004 on average.

The prices of other vital household goods such as milk, beans, potatoes and vegetables have all recorded a rise compared to last year further hurting millions of poor households in the country.

Naivas Supermarket Chief Commercial Officer Willy Kimani said the retailer has witnessed a variation in consumer habits this season compared to other years where customers are resorting to reducing quantities bought to match their budgeted costs.

“In a larger sense, the Kenyan consumer is still earning the same but prices have actually gone up. So, the issue we’re witnessing is customers changing the pack size and in some instances changing the multi-pack; for example, if I was buying a 10-pack I’m now buying an eight-pack which ultimately is more of a reduction in volumes,” said Mr Kimani in response to Business Daily questions.

“The traditional consumer goods like cooking oil, flour and cosmetic items are moving quite normally so far. What is possibly going to be a change is in things like clothing and some of the back-to-school items that people usually combine with Christmas shopping,” he added.

In their Retailers’ Holiday Survey for this year, audit and consulting firm Deloitte reports a decline in the number of retailers expecting more than five per cent sales growth over the Christmas season.

In comparison to last year, the report says many retailers have a more conservative view of growth with expectations sitting between zero and two per cent and in some cases sellers expecting a decline in sales.

“Consumers are expected to shift their spending to focus on services rather than goods, and retailers are paying attention; the number of retailers who expect sales to grow this year has dropped from 80 per cent to 67 per cent,” reads the report.

In the same breath, a consumer survey conducted by digital payments firm Visa has found out that 75 per cent of holiday shoppers plan to spend the same amount as last year, with more people expressing concerns about the economy compared to last year.

Data by the Kenya National Bureau of Statistics (KNBS) shows that the price of fresh unpacked cow milk has risen by 17.3 per cent, beans by 27 per cent, Irish potatoes by 37.2 per cent, Sukuma wiki by 10.4 per cent and cabbages by 14.4 per cent.

Poised to be one of the most expensive Christmas festivals, the season’s budget will also be adversely impacted by sharp hikes in other non-food essentials such as electricity, fuel and beer.

The KNBS data shows that beer prices have surged by 8.4 per cent to Sh205 per 500-millilitre bottle of lagers and stouts, up from Sh189 last December.

Beer is considered a festive necessity in many Kenyan middle-income households.

Just last week, the Energy and Petroleum Regulatory Authority (Epra) increased electricity prices for the third time in four months by 5.2 per cent, from Sh6.36 per unit to Sh7.12 per unit.

Kenya’s inflation, which is a measure of the country’s cost of living, has since June this year breached the government target range of 2.5-7.5 per cent, prompting the Central Bank of Kenya’s (CBK) Monetary Policy Committee (MPC) to raise benchmark interest rates in efforts to curb consumer spending.

The latest inflation rate data shows it stood at 9.5 per cent in November this year.

Ms Mueni says she has been forced to cut spending, particularly on travel and luxurious products as they strive to stretch the little cash in their pockets.

“Unlike the yesteryears when there used to be insane hype about Christmas, this particular one is bound to be stressful. The pockets are hurting and everything just looks gloomy. I will just pass time as I would on any other day,” says Ms Mueni.

Ms Mueni who lives in Kiambu County, says that contrary to last year, she does not have plans to visit her Machakos family this year as that would hit her finances.

Christopher Mwangi, who works as a site clerk at property developer Mahiga Homes, also says he will have to cut on unnecessary spending and avoid travelling to avoid a fiscal dent come the new year.

“The cost of celebrating Christmas has increased rapidly. Increase in the prices of necessities as well as hikes in transport cost will hinder me from visiting my rural home,” he said in an interview.

“I’d have loved to spend my holiday in the village but with the current economic conditions, I’ll just sulk here and wait to see what the new year holds for us,” he added.

While some businesses have given Christmas bonuses to their staff, many have withheld such offerings, to cushion themselves from shocks.

Emma Orina, an IT support at a local business solutions company, for instance, says her employer paid a bonus after what she describes as a productive business year.

“We received a bonus last year as well. I hope it will be the case next year. It has been a good run.”

Not so for Caxton Karanja, a sales executive at a local listed company.

Mr Karanja says his employer paid neither a bonus nor a token that he and his colleagues have become accustomed to during the festive season.

“We have been waiting to hear from the management since the beginning of this month,” he laments.

Yet not every business is faring badly. Those in the hospitality industry are thriving.

Richard Kimenyi, the general manager of Hemingways Nairobi, says the luxury hotel is experiencing good business this festive season, with both local and international guests.

‘‘All our units are fully booked this time of Christmas,’’ says Mr Kimenyi.

His Watamu counterpart Victor Muthama agrees: ‘‘We foresee closing the year with the same high occupancy as we did in December last year.’’

Mohamed Hersi, the group director of operations at Pollmans Tours & Safaris, says the majority of hotel bookings are from domestic tourists.

‘‘We have also seen many Kenyans in the diaspora, and international visitors, coming to stay in the country this winter period,’’ Mr Hersi reveals.

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