Though President Muhammadu Buhari’s programmes are gradually taking the economy out of the woods, TONIA DIYAN writes that shoppers, faced with inflation and naira fluctuation, among other factors, are passing through hard times.
Since this administration came on board, buying and selling has reduced drastically as a result of the FX rate and inflation, which has gone high from about nine per cent in 2015 to an all-time high of 17.24 per cent.
The retail industry represents a major component of the industrial market. There are about 24 shopping malls spread across the country. But the malls have a major problem: high rents.
Many people who go to the malls do so for window shopping. Reason: They cannot afford the prices of the products that are sold at the retail stores that occupy the malls.
The retail industry is affected by some of the policies of the administration. Some of the tenants have closed shops because of the high cost of doing business – no thanks to the undulating naira. The multinational corporations which source their wares abroad cannot afford it any more due to forex scarcity.
The developers of retail malls, for example, have had to deal with low occupancy, high vacancy rate, difficulty in meeting loan repayments, harassment from banks and upward review of interest rate of up to 30 per cent.
Despite these difficulties, Ini Archibong, a Public Relations Officer, Chastest Consult in Shoprite, praised the Federal Government for promoting the patronage of locally manufactured goods. He believes the economic re-engineering programmes of the government would soon show fruitful results.
He said: “It wouldn’t be out of place to commend the government on its effort to promote made-in-Nigeria goods, which is a step in the right direction. With time, it will tell on the economy.’’
Nigerians in e-commerce business are smiling to the banks as more Nigerians do their shopping via their mobile phones or the computer.
According to the Nigerian Communications Commission (NCC), Nigeria is the largest mobile market in Africa and the 10th largest in the world.
The digital space has afforded consumers the opportunity to compare prices of goods at various outlets before buying. This has also affected the retail industry as the price war and availability of goods have taken a new dimension.
Apapa Mall is worst hit by this development. The roads in and out of Apapa are in a bad shape. Residents have virtually vacated the area, due to the traffic gridlock and poor condition of ports access roads.
High cost of goods and services, low purchasing power and disposable income have taken toll on retail business. High cost of running the malls due to the high cost diesel and electricity is also major challenge. Between April and July 2015, many housewives adopted various survival strategies to cope with escalating prices of tomatoes and pepper as well as other staple foods—no thanks to naira devaluation and other factors.
In September, during the Sallah ram price increased by almost 75 per cent. A ram was sold for N120, 000.
In October, distributors of electronics took the lead in flexible payment options to satisfy the customer’s urge for their dream product because cash to pay for the item was not readily available.
Also in October, Nigeria’s retail sector grew, attracting not only foreign brands, but also online shopping.
Back-to-school shopping got bigger in September same year as more people trooped to both the virtual and physical stores to buy school items for their wards to resume a new school session.
After the festivities, in January, last year, food supplies picked up. Black Friday sales boomed as online stores gave mouth-watering discounts to customers to make the day memorable.
In July, online stores introduced ‘buy now, pay later’ scheme to enable people have access to their needs as the economic downturn bit harder. The scheme was an interest-free financing scheme.
Last June, food prices hit the roofs due to the 69 per cent hike in fuel price, galloping inflation, continued weakening of purchasing power, among other challenges.
Nigerians have since faced a daunting task of feeding as prices of food items went beyond reach.
About this time last year, online searches rose by 43 per cent as more business went online. The economic realities forced many businesses to fold up because of increasing operational costs.
Again, in February, consumers groaned under rising food prices as staple food items increased by 60 per cent triggered by prevailing economic realities, particularly crashing oil prices and weakening value of the naira, leaving a sour taste in consumers’ mouths.
