The sale of this year's Christmas items has kicked off downtown in Kikuubo though the customer turn-up is not good. PHOTO/MICHAEL KAKUMIRIZI
Year after year, people spend a significant portion of their savings during the festive season. With strong focus on sales during this time, several individuals indulge in holiday shopping.
While some eagerly embrace the idea of festive spending, others are more cautious.
In December, spending increases on several items, from textiles to clothing and footwear, as people prepare for the holidays.
Additionally, there are many discounted deals on household items during this season.
With numerous promotional messages from retailers, many individuals are busy shopping for presents and personal items.
The festive spirit is characterised not only by joy and relaxation but also by the excitement of shopping. E-commerce platforms promote Christmas gifting, and retailers offer price cuts and gift vouchers to encourage holiday spending.
However, the experience of the festive season differs across the globe.
In Uganda, for instance, some argue that Christmas sales are less impactful compared to those in other countries. Consumers often experience price hikes during the festive season, which diminishes the perceived value of discounts.
But do christmas sales live up to the hype?
Ms Irene Namazzi, a mother of three, also recalls that during her childhood, there was considerable excitement in her family as the festive season approached.
“We anticipated buying new clothes for the family. It was a way to celebrate the success of the year,” she shared.
Conversely, Ms Chrystal Mutibwa expresses her skepticism towards festive shopping. She feels that the touted Christmas sales seldom translate into meaningful price reductions.
“These Christmas sales in Uganda don’t seem realistic; prices are often higher in December than in other countries where holiday sales boost consumer morale and spirit,” she explains.
Mutibwa emphasizes that for those who are financially constrained, shopping during the festive season requires careful consideration. “Buying new clothes just isn’t a priority for me,” she states.
Johnson Mutegeka, a chef, reminisces about the excitement of December during his childhood when his older siblings would bring home new items like electronics, kitchenware, and clothes.
“We looked forward to the celebrations, but I now wonder why that excitement has faded,” he reflects.
To show how lucrative it is to earn from the December season, Ms Joyce Bukwirwa Kurabiraho, a former home Economics teacher who focuses on clothing and textiles and is the proprietor of JO Fashion in Mbarara City, says that demand often drives up prices of products in December.
Ms Bukwirwa says she got a Shs20m loan from the GROW project which she hopes to repay within two years to restock her business for the festive season.
She used the loan to buy more fabric for the busy festive season and the start of the new academic year.
“During Christmas, churches and hotels order new uniforms, and schools do the same at the beginning of the school year.
Making these uniforms takes a lot of time, and not having enough stock can lead to delays and disappoint customers with late or missed deliveries. This loan has come at a good time,” she says, hoping to make better sales and profits during the season.
Cautious pricing, perceptions
Mr John Walugembe, the executive director of the Federation for Small and Medium Enterprises who doubles as an economist, notes that traders often mistakenly believe they can compensate for a tough year through Christmas sales.
“Traders think that because the year has been difficult and customers have not been buying, they can leverage the Christmas period to make up for lost sales but there is a risk that the spending power of the consumer has not changed much. If you increase prices, then you might find that you cannot sell. By doing so, traders tend to exploit shoppers’ appetite for festive goodies,” he says.
This, he says, arises when traders often capitalise on shoppers' heightened appetite for festive treats which typically occurs when sellers take advantage of the increased demand during the Christmas season; encouraging shoppers to spend more on holiday goodies.
However, he warns that if the consumer's spending power has not significantly changed, raising prices could backfire.
“Businesses should be more strategic with pricing to avoid pricing themselves out of the market. Just because it is Christmas doesn’t mean customers have excess cash to spend,” he explains, emphasizing the need for intelligent pricing strategies.
Henrietta Lwantale, a businesswoman, highlights the importance of planning for December sales as early as January.
“I set aside money to restock my business in preparation for the festive season,” she explains.
While the excitement of holiday shopping remains, consumers and retailers alike, should navigate the complexities of pricing and value during the festive season.
Christmas spending
According to the WorldRemit Report 2023, titled: “Cost of Christmas Around the World in 2023,” Christmas can be one of the happiest times for many families, but it can also be one of the most expensive.
With rising prices across the board in 2023 compared to 2022, shoppers may need to spend more this year on gifts, food, and decorations.
In 2023, the report indicated that Kenyans spent the most on gifts for friends and family, allocating 56 percent of their monthly household income. Zimbabwe followed in second place at 41 percent, while South Africa (38 percent) and Rwanda (34 percent) ranked third and fourth, respectively.
“Expenditure on gifts, followed by decorations, took the largest share of monthly household income in five countries—Cameroon, Zimbabwe, Rwanda, Kenya, and South Africa out of the seven African countries featured in the annual survey.”
“In Nigeria and Uganda, however, the largest share of Christmas spending was on food, with Ugandan (56 percent) and Nigerian (52 percent) families spending more than half of their monthly income on food during the 2023 holiday season,” the report indicated.
Changing trends in buying habits
The PwC Holiday Outlook 2024 report, titled: “The Future Looks Festive: High Tech Meets High Touch Shopping,” provides insights into what shoppers can expect this holiday season.
The report indicates that as they prepare, consumers will likely encounter a retail environment defined by spending differences and changing buying habits; trends that are expected to shape the market well into 2025.
“Despite 59 percent of consumers indicating that inflation will likely influence their holiday spending this year, overall spending is projected to increase by 7 percent, averaging $1,638 per shopper.
However, this growth masks a significant gap between those willing to splurge and those tightening their budgets,” PwC Holiday Outlook 2024 report reads in part.
The survey further reveals that holiday shoppers are embracing both digital innovations and traditional in-store experiences throughout their purchasing journey.
While home delivery remains the dominant choice, alternatives such as ‘‘buy online, pick up in-store’’ are gaining popularity, especially among Gen Z and millennials.
It also notes that different generations exhibit distinct spending habits. Gen Z and millennials are leading in sustainable shopping, self-gifting, and prioritising experiences over physical goods. In contrast, Gen X and baby boomers favour convenience and practicality, often opting for gift cards and shopping in physical stores.
