The Ghanaian Sentiment

In our recent publication of our quarterly bulletin, Ecotrack, 3 key issues were identified and worth sharing:

• 48% of Ghanaians were of the view that job prospects in Ghana are unlikely in the next 6 months to 1 year. The rate is higher (67%) among those who are currently unemployed.
• 34% of Ghanaians do not think their financial status would improve in the short to medium term.
• As a result of the above, 37% think the time is not right to buy major household items; 44% are unable to save after buying essential product.

?What does this mean?

Consumer purchasing power dwindles, and this generally has a devastating impact on the economy in general. 2 key impacts are worth looking at:

1. Higher Cost of Living: As prices rise, consumers need more units of currency to purchase the same basket of goods. Consequently, their overall cost of living increases, impacting their financial well-being.
2. Economic Crisis: A sustained decline in purchasing power can contribute to an economic crisis. We are currently experiencing reduced consumer spending as consumers are turning to more affordable household essentials. Business slowdowns, and unemployment may follow, as the private sector is already signaling, due to the high cost of operations worsened by the current electricity crisis. All these tend to negatively impact overall economic health.

Implications for Brands:

Certainly! when consumer purchasing power declines, brand owners face challenges and implications:

1. Reduced Demand: Consumers' reduced purchasing power causes them to tighten their belts, which lowers demand for goods and services. This has a direct effect on revenue and sales for brands. Brands may struggle to maintain market share and profitability.
2. Pricing Pressure: In an atmosphere where consumers have limited purchasing power, brands might find it challenging to increase prices. Price competition becomes essential, which reduces profit margins. Brands must strike a careful balance between affordability and quality.
3. Brand Loyalty Erosion: Consumers may switch to more affordable options or private-label brands when their purchasing power diminishes. Established brand loyalty can fade, affecting long-term customer relationships.
4. Marketing Challenges: Brands must adapt their marketing strategies. Traditional advertising and premium branding may not resonate with cost-conscious consumers. Brands need to emphasize value, discounts, and affordability.
5. Innovation Constraints: Brands may struggle to invest in research and development or product innovation. Tight budgets limit their ability to create new offerings or improve existing ones. However, in these tough times, research and innovation is essential to ascertain and identify strategy to win.
6. Profit Squeeze: Lower margins and reduced sales volume can squeeze brand profits. Brands may need to optimize operations, cut costs, or diversify revenue streams.

In summary, low consumer purchasing power poses significant risks to brand sustainability. For brands to thrive in these challenging economic times, they need to be flexible, customer-focused, and agile. At MCI, we continuously track consumer sentiments and purchase behaviours across various sectors. Talk to us for current consumer and shopper trends to direct your winning strategy.

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