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The noisiest, quietest period for business

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Businesses and markets have entered their quietest period of the year, the festive season, which traditionally coincides with the annual shutdown.

A majority of firms have holidayed their mills and plants until the business cycle turns next year.

But this chilled business weather traditionally vouches for those businesses that set the festive embers alight.

The list includes food and beer makers, supermarkets, clothing outlets and boutiques and hotels and restaurants.

In their financial reports, the firms always tell shareholders the festive season is the time to tax others for extravagancy and expand spatially and otherwise to cater for those shutting down.

For many of these companies, the festive season is the time to turn the corner and immunise themselves against “January disease” which, like a hotel guest-aid, has been cultured to welcome everyone, from firms to households, into the New Year with a smile.

The month has come to be so-called because it’s always defined by an epidermal liquidity squeeze caused by the spending boom of the previous month, always closely rivalled by a spike in seasonal costs associated with rents, school fees and uniforms.

Typically, business changes down to the lowest gear during the period owing to depressed disposable incomes and low aggregate domestic demand.

Despite the financial foreboding, nobody wants to miss the party and the indulgence of the season because of these anxieties.

For the first time in nearly four years, the Christmas mood is back and people are jostling into each other, spending, wining and dining, completely unperturbed by the frustrations of 20 months of jobless recovery, the disappointment of bonuses that hardly match their sweat and expectations or the impending troubles of a possible election next year.

The price action in the market is a testimony that some dollars have been thrown around and that someone out there has ensnared the lean 13th cheque, prices have doubled, and in some instances, even trebled, chasing the few extra dollars.

Zimbabwe is perhaps the only country in the world where this is happening during this time of the year, contrary to the spirit of giving endemic in it.

A look around clearly shows the perpetrators are mainly those businesses that want others to have fun while they intensify man-hours and to spend while they collect. Their crime is new in the book, it’s called sedulity, obsession with work, staying up late, even when everyone else has gone to sleep.

Surprisingly, some operators including a four-star hotel in Harare, claim the festive price shock has financially drained-out markets, limiting spending to essentials and hurting demand.

At the back of the hotel, three delivery vehicles have queued up in a street alley to offload orders. The receiving bay is already jammed. Although she appears busier than usual as people keep on going in and out at close intervals, the guest relations officer at the main entrance claims the situation is little-changed since last year.

“We do not have any big bookings for Christmas,” the guest relations officer said in an interview.

“Just look at how vacant the restaurant is. Under normal circumstances, the restaurant should be full now because we are two days away from Christmas. The problem is the quality of the customers we have. The customers prefer not have breakfast. The hotel may be full, but people are not coming for breakfast.”

She however said the multi-currency dispensation had boosted both occupancy and average room rates, relative to the last five years. She estimated the occupancy rate was around 65%, lifted mostly by local bookings.

A waitress serving the bar and lounge also sounded the same tune, saying she loathed Christmas for one reason: it stresses her out for no additional earnings or just a few or no tips. Her employer said “no” to a double holiday allowance.

“The clients are mostly Zimbabweans and they are stingy,” she said. “I think in this country we don’t have the culture of paying tips. I’ve observed that Zimbabweans always check their change carefully after making a payment and they will demand to have every cent of the change, including coins, even if they are not available.”

Further up the street, an informal carwasher is busy trying to manually spray-paint a car to almost new with a hosepipe. It’s more than a wash; he probably wants to give the Toyota Camry a new finish.
He said business was slow, but picking up.

“Business is very low and we’re struggling,” he said. “It looks like there is no money in the market. We sometimes spend the whole day without washing any cars. I don’t think, we can expect any big changes until year end.” He said a comprehensive wash costs $5 or more depending on the type of the car.

But it’s not everyone who’s not in the game. Consumer spending patterns are traditionally skewed towards beer for men and hair and beauty for women, and this trend is rarely affected by macroeconomic shocks.

The situation in hair salons and beer taverns naturally cautions Treasury against making any tax changes that may deprive families by increasing alcohol and cosmetics budgets.

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