Majority of households plan to spend less than half the amount they dedicated to Christmas festivities this year compared to a similar period last year.
The latest survey by Fitch in conjunction with FSD shows disposable income among households in the country has dropped by 20 per cent in the past year due to the high cost of living.
"Companies have downsized in response to the high business operating environment largely due to the high fuel prices, tax regime and weak shilling. This is going to hurt the overall spending behaviour to Covid levels,'' the Kenya 2023 Consumer Outlook reads.
This is expected to dull Christmas festivities with families worried about school fees 42, housing 36 and food 10 per cent while other worries account for 12 per cent.
Real growth in spending for the year is set to come in at 5.2 per cent y-o-y to take the total to Sh5 trillion in 2010 prices.
In nominal local currency terms, growth is forecast at 12.7 per cent y-o-y, although around half of this increase will be the result of inflation, with spending reaching Sh11.8 trillion.
A majority 45 per cent of Kenyans have planned their spending after the receipt of the December/November salaries while 25 per cent have scheduled their spending to just a few days before Christmas.
Insights from the report showed 35 per cent of Kenyans feel financially insecure as 41 and 39 per cent of respondents marked a drop in money made and accumulated savings respectively.
The increase in prices for goods and services has prompted a strategic re-evaluation by parents, who are now looking for innovative ways to cut costs and navigate the Christmas season without compromising the joy of the holidays.
Sandra Achieng' a mother of three, in Nairobi, shared her thoughts on navigating the holiday season amidst financial constraints saying that she will try and improvise what she has to make the season memorable for the family.
"Christmas is a time for joy and togetherness, especially for the kids. We are trying to get creative with our celebrations, finding ways to make it special without overspending. It's about embracing the spirit of the season rather than the material aspects," said Achieng'.
While the desire to cut costs is evident, families are still fighting with the delicate task of preserving cherished holiday traditions.
A mother of two who resides in Kangemi, Elizabeth Waruguru said that she is glad that schools closed for a two-month holiday so that she can have ample time to look for more money.
"I took my kids to their grandparent's place and they will spend their Christmas holiday too. I will only go visiting with shopping on Christmas Eve and come back with them for school reopening preparations," said Waruguru.
As much as many families in Kenya are feeling the pinch some guardians are still on the plan to make Christmas a success according to their normal tradition of celebrations overlooking the rise in prices of commodities and accommodation.
Joseph Mani, an insurance marketer said that he had planned his year well enough and is ready to cater for his family to celebrate the festive season in decent vicinity away from home.
"I have already booked SGR (Standard Gauge Railway) tickets to Mombasa for my whole family where we will spend the whole of Christmas up to new year," said Mani.
"I am glad the proposed increase in fare and visiting game parks will be activated after we are done with this Christmas so that we can start saving afresh for next year," he added.
As families tighten their holiday budgets, retailers and local businesses are also feeling the effects.
The anticipated increase in consumer spending during the festive season may not reach the levels seen in previous years, posing a challenge for businesses that rely heavily on holiday sales.
Small businesses and enterprises are urging customers to consider shopping locally and supporting community enterprises to mitigate the impact of reduced spending.
Parents, keenly aware of the importance of creating lasting memories for their children, are striving to strike a balance between frugality and festive joy.
Shops and boutiques are now restocking slowly because of low demand from their targeted clients amidst the Christmas season.
Since assuming power in September 2023, the Kenya Kwanza government has already increased taxes on petrol and added remittances in NSSF and NHIF.
The government further introduced fresh taxes such as the housing levy, which has been ruled out by a court of Law but is still being deducted from the employee's payslip.
According to Standard Gauge Railway (SGR) fares will increase starting January 2024, due to rising fuel costs. Economy class rises to Sh1, 500, first-class to Sh4, 500. Children under three still ride free, and three to 11-year-olds will pay half the current rates and the Nairobi-Mombasa route in economy class will increase by Sh500 to Sh1, 500.
Kenya Wildlife Services (KWS) is also expected to raise entry fees for national parks and reserves at the start of 2024. Tourists will pay Sh1, 500, up from Sh500.
East African citizens face increased fees; for instance, visiting Nairobi National Park rises to Sh2, 000 from Sh500. Rates also surge in other parks and reserves; during high season (July to March).
EAC citizens pay Sh1, 000 for Amboseli and Lake Nakuru National Park and Sh500 for Tsavo East, Tsavo West, Meru, Kora, and Aberdare National Parks. Children and students will pay Sh500.
The chair of the Matatu Owner's Association, Albert Karakacha, speaking to the Star emphasized the need for responsible pricing and the safety of passengers, striking a balance between affordability and safety.
Acknowledging the spending power of Kenyans, he cautioned members against overcharging customers and urged them to prioritize ensuring passengers reach their destinations safely.
"I would like to caution members of matatu owner's association from overcharging customers and focus on making them reach their destinations safely,” said Karakacha.