Consumers in tight festivities spending

Consumers in the country are being forced to spend cautiously this festive season as the cost of living crisis continues to bite amid reduced purchasing power, Business News has established.

A snap survey conducted in some retail chain stores in Blantyre yesterday found that while consumers were willing to spend during this festive season, their purchases are at a much smaller scale.

In an interview yesterday, Harriet Goliyati, who was found shopping at Chipiku Retail Shop in Blantyre, said although she saved for festivities, she has failed to buy what she planned because of reduced buying power.

She said: “This is one painful festive season. I am torn between celebrating the festive season with my children as is the tradition and saving up for the life ahead.

“I only managed to buy a few items as the value of money has also been eroded.”

The Mbayani Township-based woman said she hoped her children will still find a reason to celebrate despite the hard economic situation.

Another consumer, Patrick Leonard, who travelled from Zomba to buy South African brands in Shoprite, said unlike in the previous year, he will not celebrate as he had wished because prices of goods have gone up.

He said: “The only challenge we have now is that our Christmas budget is falling short by almost one third because prices of goods keep on rising. We will still buy the goods, but in reduced quantities.”

A shop attendant in one of the retail shops said they are yet to see a hype in the shopping trends this festive season.

“We are not making more sales as we had anticipated. Even the number of items being purchased is smaller than we had anticipated,” said the attendant.

Consumers Association of Malawi (Cama) data shows that between November 2021 and November 2022, cooking oil prices have increased by an average of 77 percent, sugar by 28 percent, maize flour by 34 percent and bread by 17 percent.

Speaking in a separate interview yesterday, Cama executive director John Kapito said inflation and exchange rates have created problems for a majority of consumers, especially this festive season.

He said consumer confidence has gone down to a level where it has affected consumers’ buying power.

Said Kapito: “The cost of goods has gone up sharply compared to incomes of many Malawians and it has become difficult to contain the high rates of inflation and exchange rates.

“To make matters worse, the lack of foreign exchange has affected the supply of imported goods on the market. For those traders who are able to import, they are doing so at higher prices and the cost is being passed on to consumers.”

To survive a month, the World Food Programme reports that a typical household in Malawi needs to spend an average of K92 000 per month.

In urban areas, the report says a household needs K107 056 per month.

The country’s year-on-year headline inflation rate started picking up in October 2021 and peaked at 26.7 percent in October 2022, the highest since June 2013, before easing to 25.8 percent in November 2022.

Minister of Finance and Economic Affairs Sosten Gwengwe is on record as having said that inflation has piled pressure on fiscal performance due to price escalations for most goods and services.