More consumers, so where is the sales growth?

Nigeria’s urban population is expanding at 4.6% per annum. A growing number of Nigerians participate in the cash economy and have become consumers. We might expect listed food and home & personal care (HPC) companies (below) to enjoy steadily rising sales. But they aren’t. Two years after the end of Nigeria’s recession we took to the streets to find out why. 

Lessons from the street markets 

Two of our researchers set up a model household on a modest income, and went shopping in outer Lagos. On their budget – typical of tens of millions of Nigerians – they became acutely price-sensitive. The contents of their shopping basket surprised us. Most of their branded purchases came from unlisted companies: Boulos, Daraju, Limex, Olam*, Sankin, and Tolaram. The listed companies, covered here, did not feature as strongly.

Consumers under pressure, price points are key 

Our macro-economic research suggests that upper middle-class earnings are falling in real terms and that there is downward pressure on private sector wages generally. Price is the key battle ground and companies with the lowest price points are prospering.

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