Businesses in the Sultanate are toying with new as well as conventional ideas to boost consumer confidence, which continues to be low across different segments of society.
Several retailers confirmed to the Observer that consumer spending has been limited to shopping for essentials and they are just hoping for a turnaround in 2020.
There are several reasons for consumers going slow on spending, which include prolonged salary delays and cuts in bonuses and special allowances.
Apart from domestic factors, what is affecting consumer spending is the reports about a feared worldwide economic slowdown.
According to experts, people will spend only if they are receiving a steady income and there is no immediate threat to their jobs.
Stagnant wages and limited prospects of a job change are added factors that hurt consumer confidence. People are just trying to save enough for the rainy day across the region and this is just aggravating the crisis, said a senior executive of a popular consumer products dealership.
“I won’t say the situation is Oman specific but being a small market, there is little scope for cross-subsidising if one of the branches is not doing well. Gadgets, home appliances, furniture, fine dining, and new vehicles are always the first to face the burnt in such situations,” he added.
“Currently, big retailers are cutting down on operational costs by closing non-profitable branches. The overall strategy is to go slow on expansion, relocate to prime locations and close down unviable operations,” said the general manager of a fast-food brand that reduced the branches by nearly half. Despite the challenges, consumers can be still made to spend if they are given the confidence, feel some retailers.
“Spending is the backbone of all modern economies, which will go for a toss if consumers just refuse to do so. We need to give the assurance to the consumers that they won’t have to regret any decisions,” he said.
Easy Monthly Installments (EMIs) at zero or low-interest rates are one of the options to entice consumer spending.
“We need new ideas to keep customers coming back to us. We give them discounts as much as above 40 per cent, buy one, get one offer, unlimited offer and reward points. We understand their concern not to spend, but businesses will go nowhere if people just refused to spend,” said another pizza brand manager.
“Somewhere, sometime this spending business has to kick-start again. Spending will give a boost to the business and subsequently to production, salaries on time and finally consumer spending. If cutting on margins or taking in some losses are the way forward, we should just go for it,” said Faisal Khan, an expatriate who wants to quit a procurement job and start a business at the earliest.