What four businesses are doing to cushion the effect of Inflation in Nigeria
When inflation occurs in Nigeria, it affects everyone directly, and the poor are the most affected. In July 2022, Nigeria hit the highest inflation rate of 19.64% since 2005. Also, the world bank says inflation will likely push about a million Nigerians into poverty by the end of 2022. Although inflation has been increasing for years and may not be going away anytime soon, there are ways to cope with it if you want to expand your business and stay in business. Take a cue from the following companies devising means to cushion the effect of inflation on their business.
The Place restaurant
The Place restaurant is a Nigerian restaurant chain that empowers its customers to make a difference in their community. To retain their customers, the Place Restaurant embraced recycling takeaway packs by accepting them from customers to sell meals again for their customers. They also have a variety of takeaways to suit any budget and have the option for eat-in. They provide combo deals to suit a wide range of customers, including students and working professionals who need quick and uncomplicated meals on the go. It’s a game of satisfying customers’ demands to increase supply at the Place Restaurant.
Airtel Nigeria, a telecommunication company
Airtel Nigeria is one of the largest telecommunication companies in Nigeria and has been operating since 2001. The company has over 70 million customers across Africa and provides services like mobile phone calls, internet access and data packages to its subscribers. With high inflation is restricting revenue growth for the telecom industry, so Airtel they were compelled to hike their data plans and call rates to absorb rising input costs due to inflation.
Logistics and Delivery services
With the high inflation rate, logistics and delivery companies are finding the balance between cost and profit while running the business. Some delivery companies now charge using distance against the flat rate system to help cushion the rising inflation effects.
Laundry and dry cleaning services
Some laundry and dry cleaning services are offering weekly discounts to keep existing customers and attract new ones. Some companies offer a discount on the entire bill, which is better than just giving you a flat rate. Others may choose to give a discount on the first item of each type (for example, only charging ₦100 for your shirt).
Some businesses are better placed to withstand higher inflation than others. You can be sure of one thing: if you have a business that sells food, drinks and other items with a low inflationary impact on prices (such as airtime services), then it’s likely to be among the first to feel the effects of rising prices.
Some businesses will be able to absorb higher costs more easily than others. Airtime providers like Airtel Nigeria would likely fare better than some companies in sectors such as real estate development because they have high fixed costs which do not depend on inflation levels or economic performance. However, there is still room for growth in these sectors; there are many expansion opportunities both locally and internationally (for example, through foreign direct investment).
As you can see, some businesses are better placed to withstand higher inflation than others. But it’s not all bad news: the overall trend shows that most people are doing well enough to keep their businesses going despite the rising prices. If you’re concerned about what inflation might mean for your business and how much it will cost you, don’t worry — there are ways to cushion the impact. For example, if your business is located in an area where housing costs rise faster than other areas (like Lagos), then buying a property might make sense as part of an investment strategy so that when prices go up again in 10 years, you are covered.
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