2012 festive season sales tumble in Malawi

Businesspeople have described sales for 2012 festive season as below those of the same period last year and have attributed it to poor performance of the economy.

Random interviews by Business News last showed that most people were only buying essentials and not luxuries.

Limbe Bata store manager Evans Nkulama in an interview said this year’s sales are lower than those of last year.

“During the festive season last year, we made sales of over K2 million, but this year, I do not even know if we will make K1.5 million.

“I think this is mainly due to the rising cost of living and consumers are finding it hard to make ends meet, let alone buy shoes,” said Nkulama.

Another shop manager in Limbe, who spoke on condition of anonymity, said this year people were only buying essentials not luxuries.

He said last year, sales would shoot up a week before Christmas, but this year sales only picked up a day before Christmas.

James Taimu, an Irish potato vendor at Limbe Market, said last year he sold three bags of Irish potato during the festive season, but this year he struggled to finish one.

Taimu also attributed the drop in sales to rising cost of living.

He said a bag of Irish potato which used to cost K16 000 last year is now selling at K25 000.

A Ndirande-based chicken farmer Juliet Phiri raised 100 birds in anticipation to make a killing during the festive season.

But Phiri had a shock of her life when she only sold 10 chickens on Christmas.

“I am now struggling to look for a market for the remaining birds,” she said.

Carlsberg Malawi chief executive officer Abel Chanje also noted last week that the demand for his company’s products has dropped this year compared to last year.

He said last year people were queuing for their products, but was not the case this year.

Most experts attributed the drop in sales to economic reforms government introduced to resuscitate the economy.

Early this year, government introduced a number of reforms to fix the ailing economy. These included the devaluation and flotation of the kwacha, reintroduction of the automatic pricing mechanism (APM) on fuel, introduction of high interest rates and deregulation of water and electricity tariffs.

Since introduction of the reforms, however, the economy has taken a tailspin with inflation hitting over 33 percent and the growth of the economy has been pegged at a dismal 1.9 percent.

Although some experts have argued that the reforms are necessary to restore the economy, most businesses are experiencing a decline in sales.