Businesses in Nyeri and Kisumu struggled with sales following 82 per cent and 78 per cent declines in the second quarter of this year, despite individual spending improving, mainly driven by women and consumers aged between 26 and 35, the latest ILAM Consumer Spending Index shows.
- Though the two regions led with the decline, the ILAM Consumer Spending Index for the second quarter 2024 shows a decline in sales in all regions sampled (Mombasa, Nairobi and Nakuru).
- Businesses dealing with house fittings, restaurants and bars had the highest sales decline of 80 per cent and 55 per cent respectively.
- However, there was an increase in sales in the clothing and apparel stores segment.
Individual spending rose by 11 percent, mainly attributed to the higher cost of items purchased. “In terms of socio-economic categories, the lower middle-income segment recorded the strongest improvement in spending trends in the second quarter, while the lower income segment had the biggest decline in spending trends. 87 per cent of respondents made purchases using their own income, while 13 per cent relied on credit,” Richard Muriithi, Senior portfolio manager at ICEA Lion Asset Management, said at the launch of Q2’s index.
The ILAM Consumer Spending Index monitors consumer spending as a reliable indicator of the current state of the real economy.
The index, derived from interviews conducted on 1019 consumers and 187 retail businesses, shows that half of the respondents indicated static income levels over the last year, while 30 per cent reported lower income and less than 20 per cent saw their income rise in the second quarter of 2024 compared to the same period last year.
This represented a deterioration from the first quarter of 2024 when 25 per cent of respondents noted increases and decreases in their income respectively.
“Respondents working in the manufacturing and education sectors had the highest proportions of improved incomes while those in the trade, transport and logistics sectors had the largest proportion of reduced incomes,” Muriithi added.
