Kenyans are set to significantly cut their December holiday spending on lower personal and household incomes occasioned by a dampened economy during the year.
In a retail survey done Viffa Consultant that accessed the Kenyans expenditure in December 2020, showed that Kenyans have reduces Kenyans have reduced their expenditure as the bulk of spending has been estimated at between Ksh.5000 and Ksh.30,000 at a higher 84 per cent from 55 per cent last year.
The survey reveals a drop in projected spending between Ksh.31,000 and 500,000 which fell by a combined 32 per cent from 35 per cent in 2019.
“The year 2020 is finally drawing to a close and Kenyans are preparing for the festive season despite experiencing a very challenging year due to the negative economic effects of COVID-19. The ripple effect of a struggling economy despite government intervention through PAYE and VAT relief is a net reduction in disposable income leading to budget cuts at the household level,” the survey states.
The reduction comes as Kenyans register reduced gross monthly earnings with the survey’s gross salary distribution revealing a shrinking middle class.
The depletion of earners in the middle has seen individuals fall back in lower earning brackets with salary scales of up to sh.50,000 increasing by a cumulative 21 per cent year on year.
Spending on travels has also dropped by with 40 per cent of the survey’s respondents expressing fear of travel on perceived risks of contracting COVID-19.
“Retailers have experienced business disruption due to depressed disposable income as well as through internal challenges for some retailers,” the survey adds.
By Christabel Airo