Kenyans are set to significantly cut their holiday spending on lower personal and household income. This is due to a damping economy.
This is according to a new survey dubbed the Kenya 2020 December holiday retail survey by Viffa Consult. This will assess spending sentiments among Kenyans.
According to the survey results, the bulk of spending estimate at between Ksh.5000 and Ksh.30,000. This is higher at 84 percent from 55 percent last year.
The survey reveals a drop in projected spending. fell by 32 percent to seven percent from 35 percent in 2019.
“The year 2020 is finally drawing to a close. Kenyans are preparing for the festive season despite experiencing a very challenging year due to the negative effects of COVID-19. The effect of a struggling economy despite government intervention is that a net reduction in income leading to budget cuts,” the survey states.
The reduction in planned spending comes as Kenyans register reduced gross monthly earnings with the survey’s gross salary distribution revealing a shrinking middle class.
Kenyans gross salary
For instance individuals with gross salaries of between Ksh.51,000 and Ksh.100,000 shrink by 10 percent. Also those with Ksh.101,000 and Ksh,500,000 shrinks by 12 percent.
This against a one percent increase in gross incomes above Ksh.500,000. This is an indication of the growing class of richer individuals against the pandemic’s hit on the economy.
The depletion of earners in the middle has seen individuals fall back in lower earning brackets with salary scales of up to Ksh.50,000 increasing by a cumulative 21 per cent year on year.
Food and beverages purchases top the list of desired spending in the holiday season ahead of clothes, toiletries, personal effects and electronics.
Spending on travel is meanwhile to dip with 40 percent of the survey’s respondents. This will express fear of travel on perceived risks of contracting COVID-19.
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The majority of Kenyans have favored distributing their holiday spending across the month of December. While on the other hand price discounts have been the top factor influencing purchasing decisions.
The lower than average holiday spending expects to dampen the return to retailers. This is especially to those who largely rely on the festivities cheer to boost annual sales.
“Retailers in Kenya have experienced business disruption due to depressed income as well as through internal challenges,” the survey adds.