How inflation burden is turning Kenyans into bargain hunters

The prices of private brands tend to be less than those of nationally recognized brand goods. [iStockphoto]

A growing number of Kenyans are self-identifying as ‘bargain hunters’, signaling changing attitudes towards shopping and thriftiness. 

People are no longer afraid to be called cheap against the background of stubborn inflation rates, and many actively enjoy looking for ways to save money.

Many Kenyans now reveal they have said goodbye to discretionary costs including dining out or vacations - things they say they enjoy but now don’t necessarily need on the backdrop of the cost of living squeeze.

They are also looking to cut fixed expenses and essentials such as rent, food, and transit costs by looking for cheaper alternatives even though there is less flexibility there.

For instance, many motorists said they have dumped their cars for public means. Public transport users say they now opt to walk to work instead of taking the bus or matatu. House renters said they have moved out to cheaper housing.

This comes as hard-pressed consumers search for deals and some much-needed relief from soaring costs on just about everything.

The rising costs of goods is shaping consumers’ decisions as they choose to eat in and spend less outside their households.

This comes as higher transport and food prices, along with other rising costs, are taking a toll on everyone’s wallets. 

A spot-check and numerous findings from dozens of interviews by The Financial Standard showed the pressure on consumers’ wallets has led shoppers to prioritize “value-oriented” categories.

Additionally, consumers are largely “trading down” to more affordable brands within categories, or switching to private-label products. Private label sales have been on the rise for years, but the cost of living crisis driven by soaring energy prices appears to be turbo-charging the trend. A private brand is a good that is manufactured for and sold under the name of a specific retailer, competing with brand-name products. 

The prices of private brands tend to be less than those of nationally recognised brand goods. Besides benefiting bargain-hunting consumers, private brand items are providing retailers, such as supermarkets, with a better margin than the brand-name goods they also carry.

William Njuguna, 45, who teaches high school math, says he’s more likely to notice price increases on everyday items nowadays unlike in the past.

“I do feel like everything’s more expensive. I’m more price sensitive,” said the Thindigwa, Kiambu, resident. “But I mainly keep track of it with small items, like food.”

And Kenyans are looking for other ways to save.

With inflation soaring, cost-conscious streamers are questioning which subscription services are “must-haves” and which they can comfortably live without.

A majority of Kenyans are considering or have already cut their monthly subscription like pay Television to rein in their spending.

With inflation making almost everything more expensive, especially many of the everyday necessities like food, gas, and utilities, more expensive cable TV has become a luxury many cannot afford anymore.

This has seen many tighten their TV entertainment wallets.

It has left many Kenyans looking at their cable TV bills and asking if they are really worth it. 

“I have reassessed my monthly subscriptions like streaming services, for example - which I realise are serving as ‘money drains’,” Betty Wanjiru an insurance executive and mother of two said. 

“I have realised that if I’m continuing to live the same lifestyle, I’m paying more for it yet I can no longer afford it,” Wanjiru said.

Her sentiment was echoed by Janet Adhiambo, a receptionist at a city hospital who said she has in recent weeks been trying to save money by looking for a cheaper option for every purchasing decision to the extent possible. 

“I am now more than ever before stocking up on staples, shopping with a food list to only buy what is necessary. I’m also comparing supermarket prices to find the best deals,” the mother of one said.

“It’s all those little decisions that add up at the end of the month. I’m more keen about everything.”

Experts however say cutting back on expenses will only get the savvy Kenyans so far. 

When money is tight, one of the best things hard-pressed Kenyans can do is figure out how to get more money in the door, whether that’s through negotiating a raise for the employed ones, changing jobs, or finding a side gig, they said.

A weakening shilling is causing pain to consumers across the country, hindering the government’s efforts to rein in the stubborn cost of living.

Kenyans are forking out more to purchase basic commodities as the shilling continues to weaken due to external pressures.

The depreciation now threatens to pile fresh pressure on the prices of essential commodities, which have stoked public anger.

The financial hardships are squeezing consumers hard, posing an economic and political problem for President William Ruto’s administration, which is now almost a year into its five-year reign.

Overall inflation, which has remained stubborn, declined to 7.3 per cent in July 2023 from 7.9 per cent in June, driven by lower food and non-food non-fuel inflation. 

The inflation rate returned to the target range of between 2.5 per cent and 7.5 per cent. The ongoing cost of living crisis in the country is also affecting the way Kenyans partake in their beloved Kenyan staple that has long been considered to be immune to recession - beer.

This emerged recently as East African Breweries Ltd (EABL) revealed Thursday its net profit dropped by Sh3.2 billion in the full year to June on the back of higher taxes and input costs, and as price-sensitive and broke consumers shunned the frothy drink.

EABL - which is controlled by Britain’s Diageo and is known for its flagship Tusker beer - saw its net earnings decline 20.8 per cent to Sh12.3 billion in the full-year period to June this year from Sh15.5 billion booked in a similar period in 2022.

The brewer said EABL’s Group volumes were down seven per cent year-on-year, as inflation and higher taxes afflicted the brewer by reducing consumers’ purchasing power even as input costs jumped due to the high costs of ingredients.

Net sales in Kenya declined four per cent with excise tax escalation impacting the price-sensitive mainstream segment.