Many businesses in Nigeria have yet to see the usual spike in sales ahead of Christmas as families are cutting down on spending for the festive season to cope with the cost of living crisis in the country.
“Businesses are already witnessing a gloomy Christmas. This is because Nigerians are not spending like before for the festive season owing to inflation and high cost of living,” Femi Egbesola, national president of the Association of Small Business Owners, said in a response to questions.
“The low patronage is being felt by all businesses but micro and small businesses are worst hit,” he said.
He said the cost of doing business is rising daily with the continued surge in inputs and transportation costs, coupled with the foreign exchange scarcity hammering Africa’s most populous country.
The inflation rate accelerated to 21.47 percent in November for the 10th consecutive month, data from the National Bureau of Statistics show, as persistent fuel scarcity pushed up the country’s food inflation to 24.13 percent.
After recording growth for seven consecutive quarters, the country’s manufacturing sector contracted by 1.191 percent in the third quarter of this year.
“Activities around this Christmas have been dull and sales have been very low. People are not buying, even businesses that usually place lots of orders for gifts during Christmas are only placing a few orders,” Bilikisu Yusuf, a gift trader at Apapa, told BusinessDay.
“Nigerians are trying to cope with the constant rise in the price of everything, and businesses are also struggling to keep up with rising production costs and retaining customers,” Yusuf said.
Uchenna Uzo, a faculty director at Lagos Business School, said the rate of price increase for certain categories of goods has been astronomical while for some, the frequency of price changes has been difficult for consumers to manage.
According to him, some consumers boycotted certain brands by looking for cheaper alternatives, while others have continued with the same brands but buying much smaller quantities on a need basis.
“It is going to be a gloomy Christmas for consumers and businesses. People are just going to be very cautious about where they are putting their money on and will not go to any waste. So, it will be a kind of fairy cautions kind of Christmas,” he said.
Chinedu Allison, an attendant at one of the amusement parks in Ikeja, the park has seen less patronage compared to last year even at a time when schools would usually organise Christmas carols for their pupils and students.
“Parents are not taking their children on outings this year. We have seen fewer activities this year in terms of visits by parents and their children, and even schools are not booking for carols and events for their pupils,” Allison said.
He said he is not hopeful that the situation will improve owing to the rising cost of living. “There is no money; most Nigerians are just struggling to survive as inflation keeps eroding their purchasing power.”
Toyin Ubamadu, CEO of Wuwi Giftings, said her company has had to adopt coping mechanisms in the face of the economic challenges.
“If our clients tell us that they want to spend like N100,000 for a customer. We will still give them 10 items for that amount; the only difference is that the quantities or the scale of items will reduce. Like a 50 kg bag of rice has now been reduced to 25kg,” Ubamadu said.
