Despite the slowdown of the Ghanaian economy, there seem to be an increase in volume of sales of alcoholic beverages as consumers shift their spending to discretionary items.
This is according to the Managing Director of Nielsen West Africa, Lampe Omoyele.
He argues that most Ghanaians at the peak of the economic challenges resorted to alcohol as a way of dealing with their economic challenge.
“Globally it’s been seen that during economic challenges, people turn to look for escape and alcohol is one of the routes of escape. But one of the things that we also find is that during the period of economic challenges in Ghana, people resorted to alcohol. The story is same in Nigeria as it is also in the situation Ghana used to be during the economic down turn,” he asserted.
Mr. Omoyele also added, “The growth of alcoholic beverages in quarter one of 2015 has been driven by Origin, the innovative Origin and it is because of the innovation that we see that growth.”
Lampe Omoyele made these remarks during Citi Fm’s collaboration with the Chartered Instituted of Marketing Ghana as part of Citi Business Festival on the topic “Winning With the Consumer and the Shopper” at the Golden Tulip Hotel in Accra.
Consumers acting rationally to changing economic situations
Mr. Omoyele maintained that even though the Ghanaian economy may be on the road to recovery, brands that will survive or stay in competition are those that will be able to provide the needs of the consumer.
He says available statistics on year-to-date 2016 comparing with year-to-date 2015 shows that the total basket value growth in Ghana is at 11% as consumers are spending more on food related items and also home and personal care.
Lampe Omoyele made a strong case that increasing inflation, cedi depreciation, power crisis, VAT on petroleum and taxes among others have contributed to Ghana becoming one of the countries with the least affordable basket.
“When there is inflation but wages do not increase to correspond, then consumers’ disposable income will decline. Ghana’s inflation has increased significantly in the last 24 months from 14% to over 18% in 2016.”
“When that happens then consumers begin to rationalize. This means they don’t have enough money to spend and they rationalize by doing away with some of the things they feel are not important,” he observed.
It is clear that in the almost past two to three decades, Ghanaian consumers’ shopping habits have changed dramatically as incomes have either risen or dwindled depending on your incomes levels and new products and concepts have entered the Ghana market.
The corresponding effect is that consumer habits in Ghana continue to evolve and examining generations of consumers, it can reveal certain shopping trends with the rich going for the high end goods and services but the average Ghanaian also begin to look for alternatives.
But it is clear that both the high end and average consumers all resort to taking of alcohol as a means to solving problems they encounter or when in happy mode.
Ghana has low consumer purchasing power
Meanwhile Ghana is said to be among countries with low consumer purchasing power.
According to the report, Uganda has the most affordable basket at 10.99 dollars, Lesotho follows with 14.70 dollars, Swaziland is next at 14.99 dollars and Kenya and South Africa are at 15.06 and 15.33 dollars respectively.
For the list of countries with the least affordable basket where Ghana falls in, South Sudan is the highest at 38.60 dollars, Angola is at number two with 33.57 dollars, DRC comes in at number three with 28.80 dollars, and Ghana is at number four at 27.50 dollars followed by Cote D’Ivore with 24.55 dollars.
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By: Norvan Acquah – Hayford/citifmonline.com/Ghana
