Nielsen Sub-Saharan Africa MD Bryan Sun
comments: “The Kenyan economy has experienced a renewed period of confidence and is projected to rebound to GDP growth of 5.6% in 2018 and 6.2% in 2019 as per an African Development Bank report. The economy is also more diversified than its regional peers, which has supported its growth over the past decade and given it the ability to weather the most recent economic storms far more effectively. Nielsen’s retail data also shows that the grocery basket in Kenya is growing and consumers are opening their wallets, a sign of increasing optimism in the economy and future prospects.”
This renewed sentiment is therefore reflected in 69% of Kenyans describing the state of their personal finances over the next year as excellent or good (up by two points from Q1 ’18) and only 23% as not so good or bad. That said, it has only resulted in a slightly more positive outlook in terms of Kenyan consumers' immediate-spending intentions, which has risen to 31% of respondents (up from 27% in Q1) who say now is a good or excellent time to purchase what they need or want. This is also reflected in their job prospects with only 44% viewing them as excellent or good, a five-point drop from the previous quarter, and 47% considering it as not so good or bad. Spare cash?
Looking at whether Kenyans have spare cash to spend, only 29% said yes, although this is up from the previous quarter, while the majority (71%) said no. Looking at what their spending priorities are once they meet their essential living expenses, the highest percentage (85%) would spend it on home improvements, followed by putting it into savings (83%) and investing in shares and mutual funds (70%). Personal needs and wants follow, with 60% saying they would spend their spare cash on new clothes and 57% on out-of-home entertainment. Curtailed spending
When asked about the changes in their spending to save on household expenses, compared to this time last year, 66% of Kenyans agreed that they have changed their spending habits. In terms of the actions they took to save money the highest number (53%) said they spent less on at home entertainment, followed by 49% who took less holidays, 44% who spent less on new clothes and 39% who delayed the replacement of major household items. Major concerns
Some of the factors driving this more cautionary mindset is reflected in the major concerns mentioned by Kenyans. When asked about their biggest concern
over the next six months the highest number of respondents (16%) said food prices, 13% said their kids' education/welfare closely followed by 12% who said work/life balance and 11% who cited the economy.
When asked what their second-biggest concern
would be over the next six months, 17% said food prices, 11% said higher utility bills, followed by kids' education/welfare, the economy and job security all at 10%. Ongoing resilience
Elaborating on these results, Sun says: “Kenya has shown resilience despite experiencing multiple hurdles in 2017 and it’s clear that consumers are now feeling more optimistic and are inclined towards spending in light of improved agricultural forecasts due to improved weather conditions declining inflation levels, and a more stable political environment. However, the consumer is still cautious about their money and future prospects. The retailers need to take note of the shifting needs of the consumers and provide value for money offerings to sustain continued spend."