Sectors that made a fortune after 2017 season of gloom

Customers make their selections at Think Twice shop in Kitengela where everything is sold at Sh100 (Jenipher Wachie. Standard)

NAIROBI, KENYA: While a recent survey shows that business confidence has been rising as the political situation begins to stabilise, a few sectorscan actually show the fruits they have reaped since December.

Among the sectors that particularly benefited from the holiday festivities and which could lend credence to the index is transport, which got quite a boost from the increased travel.

After a rather lacklustre year where the general economic slowdown hit the industry hard, matatu operators capitalised on the mammoth crowds that were jostling to go upcountry for Christmas.

“The year was so tough that I don’t wish an election for this country in a long time. It could have crippled us completely,” said Matatu Owners Association Chairman Simon Kimutai.

“But as we entered the festive season, things picked up. Although we have not made as much profit as we usually made in the other years, things were not bad.”

He however said the transport sector within the city experienced little business during the period.

In retail, Naivas Supermarkets Managing Director David Mukuha said the festive season brought a huge cake for the industry as opposed to the economic stagnation in preceding months.

“The retail sector suffered a lot in 2017 but it is true that we reaped big during the festive season. When the economic stagnation was biting, our margins went as low as five per cent. But as the year came to an end the Christmas shoppers really gave us a boost,” he added.

Started well

Mr Mukuha said the year has started well for the retail sector and there could be better things to come in 2018.

Naivas has emerged as one of the retail chains expanding aggressively even as major rivals such as Nakumatt decline.

The retailer has started the year by moving into the city’s central business district, quickly grabbing the space vacated by Barclays Bank at the junction of Moi and Kenyatta avenues as well as taking up Nakumatt’s former space down the street.

The Purchasing Managers Index released last week by Stanbic Bank noted that there was a marked increase in new orders for the first time in five months, signaling a rejuvenation of the retail sectorand generally a recovery of the economy.

Businesses in the clothes selling segment, especially those targeting the lower-end buyers were other beneficiaries of the festive season if a survey done by the Financial Standard is anything to go by.

Clothes traders, ubiquitous in the city centre, said that the festive season offered them better opportunities than what the entire 2017 had granted.

Mary Ajuma, a clothing shop owner on Moi Avenue, said the festive season gave her business a lifeline after it was severely affected by the riots during the election period.

“During the violence that followed the presidential election, we closed our shops for weeks on end fearing looters who were always patrolling the streets. We barely sold a thing,” said Ms Ajuma.

“But Christmas came as a boost with many customers flocking the shops. I did make a tidy sum,” she said.

Ajuma’s celebratory mood is in contrast with some major clothes retailers such as Deacons, which ended the year quite badly.

The high-end clothes retailer expects its profit after tax to fall by at least a quarter compared to the earnings reported during a similar period in 2016, due to what its management said was a result of poor sales during the December festive season.

Hoteliers were the other beneficiaries of the festive period as local tourists flocked major tourist facilities at the Coast popular sites in the Rift Valley including the Maasai Mara.

Mike Macharia, the chief executive of Kenya Association of Hotel Keepers and Caterers, said the kind of spending seen during the festive season is benefiting the tourism industry.

He told The Standard that hotels in Naivasha, Nakuru and Maasai Mara were fully booked and the losses experienced during the year could soon be reversed if the upsurge in local tourism goes beyond the festive period and into 2018.

Visitor numbers

A brief by investment firm Cytonn recently also noted that hoteliers, especially at the Coast, are banking on local tourists to survive a highly tumultuous period where political uncertainty led to a slump in visitor numbers.

“PrideInn Hotels have started to recover and are announcing high local tourist bookings at the Kenyan Coast. The hotel chain is attributing the recovery to the end of an electioneering period that had hitherto been marked with reduced occupancy and the positive effects of the Standard Gauge Railway,” said the firm.