Families are holding off the purchase of certain items or purchasing the same items far less frequently as a way to cope with the runaway cost of living amid budget constraints.
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The shrinking basket: How Kenyans are coping with high living costs
Ms Irene Chepkoech, an Eldoret-based parent running a small business to provide for her family, has in the recent past had to make a heavy decision to strike off sugar from her breakfast table, not for any other reason, but its cost.
“Life has been difficult. While in a week I would use a kilo of sugar at my home, I’ve had to cut that down to half a kilo or avoid buying it at all and take tea without sugar when I have milk. That has made life more bearable than attempting what I can’t afford,” Ms Chepkoech says.
The diet at Ms Rose Kamau’s home, another Kenyan living in Nairobi’s Kahawa West area, has also changed considerably in the recent past as she, together with her family, tighten their belts in face of higher prices for basic goods.
“I no longer buy chicken, I had to change it because I cannot afford it. We now eat meat once or twice in a week. While I used to buy about five litres of cooking oil, I now buy just one litre,” the mother of two opens up, noting that the drastic change of lifestyle is taking a toll on her children.
“We are living a day at a time. The children can feel it and they ask what is happening,” Ms Kamau says.
They may be living over 300 kilometres apart, but the two households are connected by a situation many across the country have had to endure. With a sharp rise in cost of living leaving many unable to afford the lifestyles they were used to, they are resorting to cut down on consumption of basic necessities, shop around for cheaper alternatives or avoid their consumption altogether.
The rise in commodity prices has had a heavy impact on low-income households particularly, hitting the food basket, where it hurts most, and leaving many families living with sacrifices at the kitchen as a daily activity.
And this is even before a raft of revenue raising measures included in the Finance Act, 2023 take effect tomorrow, which will see prices of goods and services in the country rise further, even as incomes are chopped.
With deductions towards the Housing Development Fund for formal workers kicking in and Value Added Tax (VAT) on petroleum products being revised upward to 16 per cent, many wallets are bound to get into deeper distress at a time when majority have already trimmed their monthly budgets just to make ends meet.
“Following the enactment into law of the Finance Act, 2023, we will on Friday June 30, 2023 announce reviewed maximum petroleum pump prices,” the Energy and Petroleum Regulatory Authority (Epra) stated yesterday.
High fuel prices will have an impact across the economy, raising prices for transportation of goods and people, raising the cost of production of goods and thus their prices, and raising electricity prices.
Latest data from the Kenya National Bureau of Statistics (KNBS) show that the prices of just five key food products has risen by 24.5 per cent over the past year.
Sugar posted one of the steepest year-on-year increase in price, costing 49 per cent more in May 2023, than it did in May 2022. A kilo of sugar retailed at Sh194.29 on average last month, from Sh130.27 in May 2022, KNBS latest Consumer Price Index (CPI) shows.
Households have also had to spend at least 21 per cent more to get a kilo of potatoes, 39 per cent more to buy a kilo of beans and 17.45 per cent more to buy two kilos of rice. The price of Sukuma Wiki, however, came down from Sh60.39 to Sh58.66 average for a kilo.
What this means is that the five products, which cost Sh882 in May 2022, cost Sh1,098 last month, rising by Sh216.
This has seen seven in every 10 households in the country whose gross monthly income is less than Sh100,000 either holding off the purchase of certain items or purchasing the same items far less frequently as a way to cope with the runaway cost of living amid budget constraints, reveals a report by research and market intelligence firm Ipsos Kenya.
The report reveals changing personal finance dynamics, with growing inability to pay bills and challenges in meeting basic needs coming out loudly, with six out of every 10 expressing concerns regarding it.
KNBS data statistics further show that 87.7 per cent of working Kenyans earn below Sh100,000, out of whom 52 per cent earn between Sh50,000 and Sh99,999.
The survey by Ipsos reveals that a larger proportion of women than that of men is inclined to compare prices; buy the same items less frequently or switch to brands which offer more cost-effective alternatives as a way to cope with the prevailing environment.
A larger proportion of men than women, on the other hand, prefers bulk shopping at the wholesalers; hold off purchasing certain items or buy smaller packages of the same items.
In Kisii County, Mr Francis Koina is one among the many Kenyans who have resorted to slashing their monthly shopping budget as they adjust to the reality of a harsh economic environment.
“While sometime back I would spend Sh3,000 on shopping, I now spend about Sh1,500 because life has been difficult. It has gotten harder to get money. Maize flour price has risen and we now buy a kilo at Sh125, which can’t sustain my family for a day,” Mr Koina says.
Retailers, on the other hand, have had to take a significant hit as consumers’ shopping baskets contract, which means depressed sales on their end.
The Retail Trade Association of Kenya (Retrak) says that over the past three years, there has been a general contraction in the shopping basket both in terms of volume and value, a trend reflective of the stressed wallets that households have to contend with as they make their purchase decisions.
“The average quantities per basket have declined indicating challenges facing consumers in keeping up with inflation. Before 2019 (pre-Covid pandemic), we had an estimated average customer basket value range of Sh1,500 to Sh2,500. It is now averaging about Sh800 to Sh1,700 in the current year,” says Ms Wambui Mbarire, the Retrak CEO.
Ipsos Kenya also notes that, to manage the pressure “consumers are taking to a mix of measures — top among them; price comparison, scaling down shopping trips, postponing purchases, switching to cheaper options or on the more drastic side, stopping to buy certain things that they may consider non-essential.”
The survey by Ipsos Kenya was conducted between March and April 2023 and collected responses from over 1,000 respondents, 44 per cent being female with the remaining 56 per cent being male. More than two-thirds of the respondents were youth aged between 18 and 34.
