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High prices: Retailers register low sales as customers reduce
Ms Jane Nalumu, a retailer on Main Street, Jinja City, attends to her business on Tuesday. She says her sales have reduced with the dwindling number of customers, thanks to the escalating commodity prices. PHOTO / DENIS EDEMA.
What you need to know:
- Ms Generoza Komuhangi, a widow and a mother of six in Kabale Town, says she has opted to feed her family members on one meal per day unlike in the past where she used to serve them three meals.
Mr Johns Mugabi, a retail shop owner in Masindi Town, 216kms west of the capital, Kampala, has since March, noticed a decline in the number of customers visiting his shop.
If he is lucky to receive a number of them, many ask to take items on credit.
“Previously, I used to make sales of more than Shs50,000 in a single day, but these days, I find it hard to make a mere Shs10,000. Several customers want to take goods on credit, which make it challenging for me to pay bills,” he says.
Just like Mr Mugabi, many shop keepers and wholesalers around the country are experiencing tougher times, as effects of rising commodity prices continue to bite.
In a mini-survey conducted by Daily Monitor in various towns across the country from the beginning of this week, many shop owners interviewed admitted that they are currently making less sales compared to two months ago, as buyers continue to shun their shops over rising prices of basic commodities such as sugar, cooking oil and soap.
This could imply that the consumers are deliberately avoiding shops for cheaper alternative items elsewhere.
Ms Phionah Nabulwa, another retailer in Masindi Town, says her daily sales have not exceeded Shs25,000 in the last couple of months yet she used to make at least Shs70,000 daily.
Mr Patrick Okumu, a retailer in Buikwe District, says he is pondering turning his retail shop into a bar, which he thinks can fetch him more money.
“I always see people in drinking joints taking beers. It seems it is the only business making money now, I am going to try it and close the shop,” he says.
Ms Oliva Kateme, a shop attendant in Njeru Municipal Council in Buikwe District, says she has stopped stocking some items such as soap and cooking oil because many clients have since ceased buying them.
“A client who used to buy a bar of soap currently buys half or a small piece,” she says.
Northern Uganda
Northern Uganda traders are also counting losses following the drop in sales as a result of skyrocketing prices of commodities.
Many shop keepers in Apac Town say their sales have gone down and they are not making any profits.
Mr Denis Egum, a wholesale trader in Apac, says: “Most of my customers, especially retail traders in villages, are no longer coming to buy from me.”
Mr Cosmas Ameni, a wholesale trader in Ibuje Town Council, Apac District, is worried that many businesses may collapse if the prices of commodities don’t stabilise.
“Majority of us who are renting will close these businesses because we will not be able to pay rent since we are not making any profits,” he says.
In Arua City, Mr Saidi Ali, a wholesaler, says: “It has become difficult to do business because when you buy and sell expensively to retailers, they complain or some even opt not to buy. The high prices have slowed down business. We are not getting profits, and the problem is made worse with the ever increasing fuel prices.”
He adds: “In our store, some retailers come and ask for prices of goods and after telling them, they walk away in protest. We continue to ask the government to address this issue because if prices of essential commodities such as sugar, salt and soap increase, it makes life difficult.”
He says a 25kg pack of sugar currently costs Shs78,000 yet it used to buy at Shs56,000 in January. A box of washing soap now costs Shs70,000, which he says is too high for retail business.
Ms Grace Aciku, a retailer in Awindiri Market, Lira City, says selling tomatoes, Irish potatoes and other items has become a complicated business.
“We currently sell a basin of Irish potatoes at Shs50,000 and a basin of tomatoes goes for Shs65,000. So, if the buyer deals in making chips, he/she will definitely make a loss,” she says.
Mr Vincent Tugume, a retail trader in Andrews Cell, Mbarara City, says: “Because of price fluctuations, it is difficult to stock goods when the purchasing power of our customers remains low. Currently, I can hardly sell a 50kg bag of sugar a week.”
Mr Aggrey Arinaitwe, a retail shopkeeper in Mbarara City, says despite the rising commodity prices, the Muslim fasting period has exacerbated the situation.
“These people [Muslims] are big spenders, but now that they are fasting, it’s hard to get consistent customers. I am optimistic that the situation will somehow get better after Ramadan.”
Mr Moses Mubiru, the owner of M&T general merchandise in Masaka City, partly blames the current situation on some manufacturers and wholesalers, who he accuses of now selling goods directly to the final consumers in villages.
“These [manufactures and wholesalers] are using their cargo trucks to crisscross villages and items which people used to get from the town [retail shops] can be dropped at their door steps,” he says
Mr Godie Akampumuzaho, who operates a general merchandise shop in Kabale Town, estimates the decrease in his clientele at 70 percent in the last two weeks. He says he on some days returns home without selling any item.
“Between January and February, I used to serve between 30 and 60 customers per day. I am worried the bank from which I acquired a loan in January to boost my business, will soon auction my residential house which I mortgaged because I am failing to pay back their money,” Mr Akampumuzaho says.
Ms Generoza Komuhangi, a widow and a mother of six in Kabale Town, says she has opted to feed her family members on one meal per day unlike in the past where she used to serve them three meals.
“The luxury of breakfast, lunch and supper is no longer possible in my home because I need to feed these children and also save money for their school fees for next term. I only serve my children a cup of porridge at around midday and a meal at around 5pm,” Ms Komuhangi says.
In Soroti City, many customers have shunned some commodities such as sugar and soap.
“Before the commodity prices were hiked, I could sell two bags of sugar in a week, but these days, I struggle to sell even one bag in a week,” Mr Maxwell Okello, a shop attendant in Otucopi Ward, Soroti City, says.
For washing soap, Mr Okello says a section of customers now buy blue soap, which goes for Shs4,500 a bar, compared to the White Star, ,which goes for Shs10,000 a bar. Others use homemade liquid soap.
In Jinja City, some companies have reportedly suspended manufacture of soad on grounds that the cost of production is too high amid scarcity of raw materials.
Currently, the market is dominated by blue soap, which is being touted as the next alternative.
Ms Sarah Nangobi, a resident of Jinja City, says she currently buys Geisha soap for bathing because it is cheaper.
“A big size Geisha costs Shs4,000, yet a small piece of washing soap costs Shs2,000. However, some shops have abandoned selling such pieces because they are making losses, and only sell a bar which costs Shs8,000,’’ she says.
Pushing on
Mr Musa Kabugo, a businessman on Engineer Zikusooka Road in Jinja City, says despite the low sales, he has continued to restock his shop.
“This is the only business I know and switching to another may cause me losses. I have some loyal clients and these are the ones who have kept me going,” he says.
Ms Annet Nassuna, a businesswoman in Masaka City, says the rising fuel prices have forced her to abandon her car and currently uses a boda boda to her place of work, but her worry now is that her life is in danger because she leaves work late at night.
Government’s take
While the current situation has been largely blamed on external factors such as Russia’s invasion of Ukraine in February and the subsequent disruption of the global supply chain, Ugandan households have asked the government to urgently find measures to cushion them.
Early this month, government ruled out any possibility of subsidies, tax or price control relief to clothe Ugandans against the effects of rising commodity prices, which have left millions helpless and in need.
Mr Ramathan Ggoobi, the Permanent Secretary in the Finance ministry, also the Secretary to the Treasury, says statist interventions would worsen an already bad situation.
Turning to history for lessons, Mr Ggoobi said former President Idi Amin started price controls, but it didn’t solve the problem, and instead caused a shortage of commodities.
“If you aren’t a producer of a good, why do you want to determine the prices? Why don’t you leave these businesses that are competing to compete? Businesses want to make money. If they overcharge, customers will go away. This is what is happening to some people … They used the opportunity to overcharge, but they ended up burning their fingers,” he says.
Compiled by; Al-Mahdi Ssenkabirwa, Bill Oketch, Richard Kyanjo, Santo Ojok, Tausi Nakato, Abubaker Kirunda, Alex Ashaba, Ismail Bategeka, Rajab Mukombozi, Sheillar Mutetsi, Felix Ainebyoona, Felix Warom Okello, Robert Muhereza, Denis Edema & Emmanuel Arineitwe.
