Kenyans cut luxury spending as high inflation keeps families awake
Friday March 10 2023
Kenyans are reducing spending on luxury items, toys and electronics as they chase bargains to deal with the unrelenting inflation that is eroding purchasing power.
Retail chain operators, electronics dealers, boutique operators and footwear sellers say shoppers are becoming choosy in the face of the highest inflation in a generation.
At Naivas Supermarket, the largest retail chain in the country with more than 84 stores, Kenyans are keeping within their brands but are downgrading in terms of size and pieces of items they are putting in the shopping baskets.
Chief Commercial Officer Willy Kimani notes that over the past few months, shoppers are keener on items under the “orange sticker programme” with discounted prices.
Read: Rising food and gas costs push Kenya’s inflation up to 9.2pc
“Contribution from items in our orange sticker programme has actually doubled especially the last four to five months,” he said.
Higher food prices have led to stagnated sales of electronics, luxury items, clothing and toys
“Luxury items, toys and electronics have taken a beating in the sense that there is no growth. I won’t say there is a decline but there’s no growth as had been the case when it came to such items,” he explained.
The Kenya National Bureau of Statistics (KNBS) data shows households spent 13.3 percent more to put food on the table compared to a year earlier, with pressure coming mainly from vegetables whose production has dropped on a prolonged drought.
Maize flour increased by 21.5 percent to Sh180 per two-kilo packet, wheat flour went up by 29.4 percent to Sh186 per two-kilo packet while the price of cabbages shot up by 20 percent to Sh60 per kilogramme over the past year among goods used to measure inflation.
The country’s inflation rate in February edged up for the first time in four months to 9.2 percent on renewed pressure on food and cooking gas prices.
Food usually has the biggest impact on the overall movement in prices because it accounts for nearly a third of the shopping basket for most Kenyan families.
Irene Eshiunwa, a mother of two, says she no longer makes monthly trips to Eastleigh in Nairobi to buy clothes for her family due to budgetary constraints.
“Even in Gikomba, the prices escalated, so now I am focusing on buying food in bulk to stock,” says the resident of Umoja Estate, noting that she is yet to recover from school fee increases introduced in January.
Private academies adjusted school fees by up to 47 percent this term in efforts to shield their earnings from a surge in the cost of living.
Kennedy Kinyua, who operates a second-hand shoe stall in Ngara, Nairobi, says customers have cut back on purchases decrying inflation pressure.
Read: Inflation easing offers glimmer of hope on cost of living crisis
“Customers that used to order two pairs a month have reduced to one and others just stopped buying,” says the trader who imports from the UK.
A similar script plays out at Imenti House, a commercial building within the Nairobi city centre that houses stalls dealing in clothing, shoes, electronics, nail bars, beauty products and accessories.
Traders say they are struggling to pay rent following a dip in customer traffic as well as orders coming through online platforms such as Facebook, Instagram and WhatsApp.
“In the entire month of February, the sales we made are less than Sh6,000 which is a disaster considering we would make Sh7,000 a day before things got this ugly,” said a men-clads boutique operator at Imenti House.
Several stalls have shut down, others have negotiated with the caretaker to pay rent in instalments while other operators are sacking their staff to manage costs.
At Dove Computers operating along Biashara street in Nairobi, the customer numbers have drastically reduced over the past five months, bringing the business down 20 percent.
Prices of commodities such as desktop computers, servers, laptops, gaming, televisions, phones and tablets stocked at the outlet have increased by at least Sh5,000.