Diminishing disposable income trumps Christmas shopping season as Nigerians adjust to recession

Black Friday, which has assumed significant presence in Nigeria, at least in Lagos, Abuja, Port-Harcourt (and a few other cities) traditionally ushers in the Christmas shopping season in the United States of America, its place origin.

In Nigeria, Black Friday might not be trigger for the Christmas shopping season, anecdotal timing puts it around the last week of November and the first week of December. This appears not to be the case this year as both consumers and retailers bemoan the rising cost of essential commodities and of doing business respectively.

“This might turn out to be my worst Christmas in 20 years. I have been in the beauty business for over 25 years and last time I saw this kind of low sales Christmas shopping season should be about 20 or so years ago. By the last week of November and first week of December, ladies start buying cosmetics for two reasons: the first is to hedge against artificial price hikes and the other is to prevent the products going out of stock with the shopping season rush” said Caroline Umeh, CEO Philby Beauty in FESTAC.

Umeh expressed disbelieve that with Christmas approaching she closes some days with less than N10, 000 worth of sales. “Previous years, around this time, I rarely went home with less than N100, 000 because of the Christmas shopping spree” she added.

The flip side of low volume of sales is loss in earning ability, in cases of job loss due to companies folding up amid the recession or less disposable income and the need to re-order priorities. Both cases exist and have impacted the shopping season.

“The company I used to work for could not take the heat anymore and folded-up” explained Emmanuel Obanya, who did not want the company identified. He continued “sometime ago in June, the managing director slashed our salaries by 50 percent alluding to difficulties in sourcing dollars to import raw materials because it was a manufacturing firm. Then in October some of us were laid off because the company could no longer bear the cost of keeping us due decreasing profit margins.”

Asked about Christmas he said “with a bag of rice over N 25, 000 if I am able to buy half a bag or something even less, we would be fine. These are hard times but all is well.”

In some companies where it was usually the custom to giveaway bags of rice and other items to workers and customers, they are redefining who truly qualifies for these giveaways in order to scale down costs; this means reduced Christmas sales for vendors too.

For instance, the Chief Executive Officer of a real estate firm and owner of properties at the Banana Island, who does not want to be identified, lamented the significant drop in business in that sector stating “this year’s Christmas will be really different. In the past we simply bought over 150 bags of rice, gallons of vegetable oil and other household items to randomly distribute as Christmas presents to both workers and friends of the company. This year, for anyone to qualify for these presents, they must have donated blood and sweat to the business.”

Some families who used to travel to their villages to celebrate Christmas have had to suspend this year’s trip. In some cases they decided not all will travel citing cost and dwindling volume of sales because some of them are business owners.

“We must not all travel this year. We have decided the younger children and their father will travel leaving older children and me, a painful decision to make yet a necessary one” affirmed Ebele Okeke, a distributor of sachet and bottled table water at Ilupeju Industrial Estate.

STEPHEN ONYEKWELU