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Naira Devaluation, Inflation, Dampen Black Friday Sales 



Black friday naira

Near-record inflation which has brought down the value of the naira is casting a shadow over this year’s holiday shopping season, which officially kicked off on Black Friday, a day when prices are discounted and items become cheaper.

Despite saving money in preparation for the Black Friday discounts, Josephine Uzorma says she was unable to take advantage of the deals because the prices were too high and she could not afford the items she had budgeted to buy.

Another customer claimed that because prices had risen before the Black Friday sales, cutting them now would just return items to their prior prices from a month or two ago. As a result, the customer “doesn’t perceive a difference between the sale price and the regular price.”

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It reduces consumer purchasing power, making things more expensive. This means fewer individuals are able to afford products on Black Friday, even at significantly discounted prices. On the other hand, inflation bars retailers from reducing the prices. In some cases, it forces them to increase the prices, further reducing the number of people taking up deals.

Nigeria’s inflation has been on the rise since the beginning of the year, with the headline inflation reaching 21.09 percent in October 2022.

BusinessDay surveyed and visited 10 stores in total; six merchandisers, two clothing stores, and two food items stores currently offering Black Friday/clearance sales.

Of the six merchandisers visited, three majored in the sale of human hair while the other three majored in the preorder sale of shoes, bags, and clothes. The six of them alluded to “higher prices and exchange rates” affecting their prices this year.

Many businesses in Nigeria, especially those who manufacture lifestyle products or buy already manufactured ones, rely on imported materials or finished goods to sustain their businesses.

To prevent running at a loss, businesses would be unable to give crazy discounts expected by shoppers during the Black Friday/ clearance sales.

Naira currently trading at N735/$ in the black market and rising inflation have made it almost impossible for Nigerian businesses to profit from their products.

Prices of petrol have also increased due to the ongoing fuel scarcity faced in the country, as a result, the cost of delivering products to the final consumer has spiked — an additional burden to shoppers hoping on getting the best from Black Friday but whose hopes have been dashed by inflation on the value of the naira.

Source: Business Day

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