Continuous dropping of inflation figures, positive consumer confidence and an expected economic growth is set to mark a strong performance for Nigeria’s retail sector in 2018.
According to the National Bureau of Statistics (NBS) inflation rate, measured by the Consumer Price Index (CPI), dropped to 15.91 per cent in October from 15.98 recorded in September and it’s expected to further drop in the fourth quarter of 2017.
The NBS in its last report on labour statistics projects unemployment rate will reduce by 2018, which will mean more earnings and disposable income.
With this year preceding Nigeria general elections, myriads of political activities, observers believe would result to more money in circulation in the country and the retail sector is expected to be one of the beneficiaries.
Chief executives of some of Nigeria’s largest and most innovative companies at a BusinessDay CEO event last year had expressed confidence about the growth prospects of the country for 2018, similar expectations held also by various economic bodies for 2018.
International rating agencies such as Fitch and IMF have also predicted that Nigeria economy in 2018 will grow by 2.6 percent and 2.1 percent respectively. These expectations, obviously could lead to increased consumer spending.
In 2017 retail sales was down by 16 percent to 105 billion from 125 billion in 2016 according to AT Kearney’s 2017 Global Retail Development Index (GRDI) report.
However, since Nigeria’s exist from recession there has been a continuous increase in consumer confidence.
Consumer confidence is an economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.
NOI Polls for second quarter of 2017 put the level of Nigeria Consumer Confidence Index (CCI) for second quarter 2017 at 64.8-points representing an increase of 2.1-points when compared with 62.7-points obtained in the first quarter of 2017.
According to the survey, the slight leap in the confidence of consumers in Nigeria could have influenced their propensity to purchase with a degree of optimism about the overall state of the economy into 2018.
The Central Bank of Nigeria (CBN) also in its Consumer expectation report released June also report that this year Nigerian consumer spend will rise.
“The consumer outlook for the next quarter and that of the next 12 months were however, positive at 21.3 and 34.2 points, respectively”
In the report out of the sample size of 1,950 households drawn from the National Bureau of Statistics (NBS) Master Sample List of Households average index of 14.3 points, expect some increase in their expenditure on basic commodities and services in the next 12 months”
Factors– all of which bode well for retail sales – included in the report are expected increase in net household income, and expectations to save a bit and/or have plenty over savings in the next 12 months.
For its survey, Neilson also projected an increase in global consumer confidence this year. The retail research firm, in its report released in April last year, revealed that Nigerians who were sampled for the survey using mobile application remain positive in the personal finance in 2018.
Clothing sales is expected to lead the bumper sales with increasing aspirational tastes, lifestyles especially among the growing youth population representing 65 percent of the national total population.