It's a humble Christmas for majority

A report recently published by The Standard estimated that over 10,000 employees lost their jobs as companies shut down or simply downsized to stay afloat. PHOTO: COURTESY

Christmas season has traditionally been the time Kenyans indulge. If they don’t try an exotic dish during this period, then they will have their normal staples such as nyama choma and ugali in plenty.

And for those selling meat and related delicacies notably cheese and ham like Eve (not her real name), the festive season - or the peak season- is when they make a kill, compensating for drier months of January and February. During the festive season, salespersons like Eve receive hefty bonuses.

There is loads of cash to throw around. So much that Eve is normally left with some extra cash to throw parties, or just have fun with family and friends. Often, she takes this opportunity to travel upcountry in Western Kenya, in the company of her husband and their two daughters. Here, they meet with her extended family and celebrate.

Unfortunately, depressed sales this December is a strong indication this year’s festivities will not be as lively as they have been in previous years.

Eve insists this does not look like usual feel-good Christmas. Already, she has decided that she will not travel to her rural home. And that is bad enough.

LOW SALES

“People are not buying,” says Eve, a salesperson for meat products in one of the major supermarkets in the city. “Sales in this Christmas season have been low. It does not look like a festive season,” said the mother of two.

She says at her branch, December sales normally average between Sh6 and Sh10 million in a typical Christmas season. However, in the first 15 days of December, they had only done sales worth a million shillings.

“I have been in this business for five years, long enough to know things are not good,” she told Weekend Business. Her colleagues at the troubled Nakumatt Supermarkets in Junction have already received the worst news-- they will not be getting their bonuses this month. And she is afraid that the situation at her place is not going to be any different.

So she is waiting for the news that will confirm her worst fears- that this it will be a broke Christmas.

With a slowdown in the economy, Christmas might be less merry for most Kenyans. Generally, 2016 has been a bumpy year for most workers. To most Kenyans, there is just not enough cash around.

Without sufficient disposable income, most employees have kept off the supermarkets, denying people like Eve the much-needed cash for Christmas.

As the going has gotten tough for most companies, hundreds of thousands of employees have been laid off as businesses have struggled to find a footing in a tumultuous environment. For those who have been lucky to avoid the purge, they have had to contend with slashed salaries, and less or no bonuses. Promotions have also been far between.

A report recently published by The Standard estimated that over 10,000 employees lost their jobs as companies shut down or simply downsized to stay afloat.

Cash-strapped national carrier Kenya Airways (KQ), for example, is said to have given its employees two options: a job-cut or pay-cut. KQ employees who opted for a pay-cut, reported to be almost half the targeted numbers.

According to the Kenya National Bureau of Statistics (KNBS), consumer prices increased to 6.68 per cent in November of 2016, from 6.5 per cent in the previous month and above market expectations of a 6.48 per cent. This is the highest inflation rate since February, boosted by higher food cost.

“Between October and November 2016, Food and Non-Alcoholic Drinks’ Index increased by 1.17 per cent,” noted the monthly report by the national statistician. The national statistician attributed it to the increase in prices of several food items which outweighed the decreases of others. “The year on year food inflation stood at 11.13 per cent in November 2016,” added the report.

Transport costs went up by 0.55 per cent due to increases in pump prices of petrol and diesel, making it costlier for families to hop into a family car and drive to furthest corner of the country to celebrate Christmas with relatives, or simply go for a holiday in the Coast.

A two-kilo packet of sugar which a month ago was retailing at Sh230 has since shot up to more than Sh300.

In short, unlike in the previous Christmas season, there might be fewer aromas of chapati, chicken stew, pilau, nyama choma, wafting out of the many households. And if it will be there, then it shall come at a high cost to the many poor families.

INFLATION RATE

The high inflation has not spared the teetotalers nor the alcoholics. The price of alcoholic beverages, narcotics and tobacco- a favorite for most revelers during the Christmas season- went up 14 per cent from last year to November. Those nice sneakers and designer clothes for children to flaunt in keeping up with the Christmas mood will also not come by easily after prices for footwear and clothing went up 4.65 per cent in 2016.

Already, retailers have given signals that all is not good. Naivas Chief Executive Director Willy Kimani in an interview with Business Beat admitted that this has not been the best of the years for retailers.

“The general slump in the economy has affected us the most. In the last two quarters consumption has been low, meaning retailers are struggling,” said Kimani noting that the upcoming general elections have made things worse.

“Next year is an election year, a time when traditionally, consumption slumps, especially on high-value items. We end up selling basic food items, yet we have also invested in other products,” added Kimani.

“While traffic to outlets does not necessarily reduce, the basket value does, and it is a key challenge,” explained Kimani.

Nakumatt Holdings, the country’s largest retail store, is however has a different view and cited sales in this year’s festive season are better than last year’s.  The managing director Atul Shah told Weekend Business that they expect sales to go up 34 per cent this festive season.

According to Shah, the festive season, which traditionally kicks off with Diwali festivities, is on to a good start with increased customer footfall at a majority of its 62 branches across East Africa.

Shah added that for the third year running, Nakumatt has also disclosed a marked growth in the rate of Gift Voucher purchases by local corporates, individuals, public and Non-Governmental Organisations (NGOs).