Most businesses in key towns reported increase in sales in third quarter of the year with retail stores and leisure outlets leading the pack, according to the ILAM Consumer Spending Index Q3 2024.
- Businesses in Mombasa had 83 per cent sales increase, the highest in followed by Nairobi, Nyeri, Eldoret, Nakuru and Kisumu at 68 per cent, 50 per cent, 48 per cent, 44% and 41 per cent respectively.
- Sales in house fitting and accessories, and apparel, decreased by 65% and 46% respectively.
- According to the index, sales increased because of more customers buying (47%), existing customers purchasing more (41%) or due to an increase in prices of goods (12%).
On the other side, higher taxes (27%), higher prices of goods (26%), seasonality (23%), and the change in customer preferences (14%) were the main causes of decreased sales.
The prominent products associated with increase in sales was maize flour, cooking oil and sugar and the decrease in sales was attributed low demand of products such as shoes, school and accommodation.
“Retail businesses surprisingly reported improved sales trends despite the prevailing operating environments,” said ICEA LION Asset Management Chief Executive Officer Einstein Kihanda
ILAM Consumer Spending Index is aimed at tracking consumer spending as a gauge of the trends in the real economy. It is based on interviews of approximately 1,200 consumers and 200 retail businesses in major urban centres across the country.
Income trends peak
Judd Murigi, Head of Research at ICEA LION Asset Management noted that half of respondents indicated static income levels over the last year, while 30% reported lower income and less than 20% saw their incomes rise in the third quarter of 2024 compared to the same period in 2023. This represented the best income trends this year so far.
Respondents working in the manufacturing and trade sectors had the highest proportions of improved incomes, while those employed in wholesale and retail had the largest proportion of reduced incomes. This represented the second successive quarter when manufacturing sector workers have led in increased incomes.
Women, Younger Consumers, Spent Less
Individual spending trends fell by 3 per cent in the third quarter of 2024 compared to the second quarter, with women spending less for the first time in 2024. The 36–45 age group had the highest proportion of individuals spending more, but this was offset by a large proportion of those aged 18–35 spending less.
Almost 90 per cent of respondents made purchases using their own income, with the remainder using credit to spend.
