Covid-19 dims Christmas spirit among shoppers

A green Christmas wreath with gold and red bells hangs over the Game Uganda entrance. Garlands drape over entrance walls too. Inside, soft Christmas music plays as shoppers trickle in every few minutes. 

The string lights are not up. Neither is that Christmas tree with dangling bells and wrapped gift boxes at the bottom. 

This much is the store’s standard of the festive season decor. The few Christmas trees are up for sale. Factories in China barely manufactured any trees, stores say. 

It is now weeks since the Black Friday discounts ended and the focus for stores is on making the most out of the next two weeks of the festivities. It is written in the hundreds of fliers hanging above the shelves in most stores. 

This year’s Christmas is like no other. Because of the Covid-19 pandemic, the annual promotional event lasted longer instead of one day. 

“It was the first time to spread out the Black Friday over 28 days and we achieved our objectives as a business and we kept a steady flow of customers. Between last Christmas and now, numbers were more less the same,” Frederick Olwit, Africa Store manager, Game Kampala says. 

   In the past years, people flowed like rivers, most of them moving in the same direction to pick beer, soft drinks or a home appliance on Black Friday. 

This year, changing consumer needs demanded that stores repackage weekly Christmas deals to make a profit. 

“The biggest catch for customers has been more in general merchandise, personal care, electronics, sports equipment unlike those black Fridays where people would smash down doors to come and buy soda and liquor. We did not see that dash for those,” Olwit says.
Unlike other businesses, stores were categorised among essential services and remained open during the months’ long lockdown.

 In a holiday like this one, strategic promotions facilitated by suppliers allow stores to meet their sales targets and retain profit margins. 
“Sales have been very good. The biggest challenge we have had is getting or replenishing the stock,” Olwit says without giving details of the sales figures. 

In downtown Kampala, masses of people rub shoulders as always. On those non-motorised lanes with dying grass planted early 2020, people swirl around merchandise. There are toys, masks, fruit, confectionaries, jewelry, second hand shoes, bags and clothes lying throughout the street. Music that speaks with political undertones booms over the crowds. As you pull your eyes from one thing to another, nothing screams Christmas until you see a few street vendors selling tinsels. 

The Christmas season is important to traders given the boost it contributes to their annual sales.

 According to the consumer price index published by Ugandan Bureau of Statistics ending November, prices for clothing, footwear, glassware, tableware, utensils, furnishings and household tools grew at a slower rate in November compared to October. Even then, traders are yet to count their gains. Joseph Matovu sits in Mini Price arcade as he awaits the day’s shoppers. 

“Christmas business is very bad this year,” he says, “Covid-19 came and hit us badly. China, where I import from, was locked down so we have not imported yet we must work and pay rent.”

Matovu has not imported a thing since March when Uganda went into lockdown. 

“Whatever stock you see is what I had before lockdown. I am now selling it and in January, I will close shop,” he says. 

The wholesaler dealing in women’s first hand clothes has been in this trade for eight years. He remembers importing containers of merchandise in the past years and earning profit before Christmas. 

“You would have found my shop crowded with shoppers in the past. By Christmas Day, I am out of stock. I’d normally sell to people from Democratic Republic of Congo and Sudan, Uganda’s villages even youth starting retail businesses,” he says, “If lucky you’ll make sales worth Shs100,000 in a day yet we used to make sales between Shs2m and Shs3m daily.”
Low customer numbers
In another arcade popular for its huge shoe stocks, Canan Ntalo is working despite the year’s distress. “Even if you do not ask me, you can tell from the atmosphere here that things are not moving well. Business is low everywhere. We are affected by both Covid-19 and politics,” he explains. 

The 50-year-old who sells men’s shoes opens up about 2020 after 20 years in this wholesale and retail business. His current stock is everything he imported before the March lockdown. Shoppers should have been buying but signs were clear they would not so there was no need to import new stock. Like Matovu, he’d lost customers from Tanzania, Rwanda and Democratic Republic of Congo. 

“Christmas is just part of the good seasons. Now, you can spend a day without a single customer buying. Some days I get 10 customers. In business, this is what I call a dead year but I think next year will be better,” he says. 

Retailers who sell Christmas decorations get one chance to record robust sales and it is easy to imagine how lucky they must be this season.  At Cornelia Kukunda’s shop, customers stop to inquire about prices now and then. 

“Ahhhrgh…business is very bad,” she says, “Companies are not buying yet they used to buy and decorate their offices. Some buyers fear to come to town because they fear Covid-19.” 

With low customer numbers, prices are dipping for the stationery shop that planned to use the holiday to boost sales.

“I have to get the amount I can survive on so that means selling this stock instead of keeping it all year. A 2.4 metre Christmas tree costs Shs250,000 this year. Last year, the same tree was at least Shs300,000,” Kukunda says. 

These experiences and more are unsurprising for analysts who say the country is still suffering the effects of the pandemic. A combination of factors including travel restrictions and financial hardships are at play, according to Lawrence Bategeka, an economist and Hoima Member of Parliament. 

“Even if traders imported goods, demand is very low. Wages have not been paid by firms, especially small and medium enterprises. Government has experienced significant decline in revenue. Credit is not forthcoming because financial institutions are under severe stress so I do not expect much,” he says.  

This explains why spenders like Natasha Ainomugisha are distancing themselves from anything that barely fits in their monthly expenses today. 

“I love to window-shop and I am a big spender. I love a good Café Javas breakfast or Carribean Jerk chicken. I love shoes, bags, new dresses and makeup. In January, I promised to buy myself a washing machine but guess what, I lost my job in May. I was only able to pay my rent up to June. My boyfriend pays my rent now and I can only afford to buy food and eat home cooked meals so I hate that I cannot buy myself anything this Christmas season,” Ainomugisha says. 

Physical retail stores have, for years, faced competition from online stores. The Covid-19 pandemic made online players more relevant as more people visited online stores when “stay at home campaigns” became common. Like the supermarkets, Jumia Uganda kicked off its sale online in November with expectations. 

“Unfortunately, I am unable to share figures. However, for the holiday sales, we anticipate customer spending to follow the trend which we have seen for most of the year and that is more focus on home essentials, home appliances and supermarket items as well as safety essentials,” Samantha Abaho, the public relations manager Jumia Uganda, says. 

Globally, Jumia Group reports 113 million people visiting the online store during its five Black Fridays. Over 4.8 million packages were handled with shoppers spending more on fashion, beauty, fast moving consumer goods, home appliances and phones in that order. 
 With the festivities soon out of the way, stores are already pinning their hopes on back to school discounts. Analysts hope retailers can manage their expectations. “

“Going by the information from the International Monetary Fund, the economy has shrunk by about 1 per cent of Gross Domestic Product during 2020. 1 per cent might sound small but it is significant in money terms. We are now worried about the weather conditions which have not permitted a bumper harvest this season and we are likely to have a shortage of food as the year starts,” Bategeka says. 

“Even when the year opens for school children, finding the money is going to be a tough thing. Term three for candidates is opening I am told on January 18 so luxurious spending is not advisable especially when sources of income are constrained.”

The good news is that the United States of America, Russia and United Kingdom have started immunizing citizens against Covid-19. Germany, France, Belgium, the Netherlands, Spain, Switzerland and Portugal are among the countries waiting to roll out the mass immunization with vaccine authorisation in the pipeline. Analysts want to believe that these vaccines will trickle down to countries like Uganda. 

“The problem was caused by this shock and once it becomes insignificant, we could begin witnessing better. But, it will not leave us the same way,” Bategeka concludes.

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