Soaring prices affect Nigeria’s consumer consumption pattern
By Felicia Nwosu
Higher consumer goods inflation rates erode purchasing power, making it less likely that consumers have excess income to spend after covering basic expenses such as food and housing. Higher price tags on consumer goods also deter spending. Prices, affected by the rate of inflation and budget constraint, are impacting consumer spending on goods significantly among Nigerians.
This was disclosed by consumers when MARKETING EDGE recently polled shoppers at the popular Ikeja City Mall to feel their pulse about the effect of incessant rise in prices of consumer goods, its implications on buying habits, as well as on consumption. Consumers at the mall and other retail outlets that the magazine team visited decried the incessant rise in prices of consumer goods as it is having a heavy toll on their purchasing power.
Surprisingly during the visit, long queues associated with the ISM seemed to have suddenly disappeared due to the economic downturn which is biting hard on the citizens.
One of the shoppers at the mall, Roger Badejo, a retiree, bitterly lamented the high prices of goods. According to him, the high cost has drastically affected both the quantity and quality of his purchase. He revealed that as a retiree, he usually does his monthly shopping with the monthly allowance sent by his children. He, however, noted that it has become very difficult to make his usual purchases as he has been forced to cut down on the quantity, limiting himself to only the necessities.
His words: “The economy is in a comatose, nothing is really working, we are not sure of getting any contract, the whole sector is actually suffering. Before now, I used to stock the house, but not anymore. So the government needs to provide an enabling environment for business to thrive.”
Another consumer, who gave her name as Ronke, stated that in her scale of preference these days, food is the priority. According to her, “It is ridiculous! There is no shopping for clothes or chocolate or trying out on new products. You can’t afford to do that now, as no money is coming in. So whatever you have, you have to manage it. No spree spending.”
She added that the government cannot effect any positive change for now, as it is already weighed down by other challenges such as insecurity and banditry.
In a related development, traffic at the cinema in the Mall was very low even when there was no increase on ticket prices. An inside source attributed the low patronage to the economic condition of the country, and the total adherence to Covid-19 protocol directives, which stipulated the numbers of people to be admitted into the cinema hall at a time. Although our source equally revealed that most cinema hall in some of the Shoprite’s Mall across the state have been experiencing low patronage since the xenophobic incidence in South Africa.
He also revealed that apart from the economic hardship, the sales traffic also dropped due to a large number of customers being sent out for not wearing facemasks when coming into the mall. He, however, added that they sometimes experience huge traffic during some weekends.
Recall that recently, the global retailer, Shoprite, was announced to have been taken over by Kentron Investment, with effect from 24 May 2021.
According to our source, Kentron would acquire 100% of Shoprite International Ltd, equity interest in retail supermarket Nigeria Ltd.
He hinted that employees who are covered under the collective agreement concluded on 14 April, 2021, and who are still on the employment of the company, would receive a compensation of ex gratia payment equal to two weeks gross salary for each completed year of service capped at 4 month’s salary. This will be processed once the money paid by the new shareholder is deposited and cleared in Shoprite International’s bank account.
While responding to the effect of the change of ownership on Shoprite’s operations, he disclosed that within the short period of transition, the mall is already witnessing frequent power outages.
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