It is the season of clearance or percentage discount promotion sales, where selected products are sold at ridiculously low prices both online and offline, often referred to as Black Friday. Nigerians, especially retail traders, are always eager for opportunities like this, especially when it is close to the yuletide season. It is a period when one can get as much as 99 percent off selected goods.
Black Friday is an informal name for the Friday following Thanksgiving Day in the United States, which is celebrated on the fourth Thursday of November. Black Friday has been regarded as the beginning of America’s Christmas shopping season since 1952, although the term “Black Friday” didn’t become widely used until more recent decades. This culture of Black Friday has since spread to different parts of the world.
Nigeria is no exception, and on this year’s Black Friday, shoppers rushed to the malls looking for great discounts on products that are usually more expensive. Local traders were present to seize this opportunity as well.
At the Ikeja City Mall (ICM), retail traders jostled with consumers for products which they would be selling later at their shops, as the profit margins realised from these heavily discounted goods were too good to miss.
Queues of distributors’ vehicles (like Indomie instant noodles) took almost half the parking space in the mall, as car owners struggled for the remaining space. This they did to meet the demand for discounted products that sold the most.
Sales Sales Sales
A visit to the popular Ikeja City Mall (ICM), revealed that South African retail brand, Shoprite, had its Black Friday sales ongoing, last Friday. Prices of popular instant noodles, Indomie, and malt drink, Malta Guinness, were crashed to the point where Malta Guinness that normally sold for N150, was sold for N85.
A conversation with a member of the staff revealed that most of the shoppers were retailers as they bought in bulk. The staff who preferred to be anonymous, also said shoppers were literally fighting each other for the available products on display. He said, “If you were here yesterday, you wouldn’t be able to get in, as the shopping hall was jam-packed with shoppers. They were fighting to get their share of the products with discounts. Products like Malta Guinness and Indomie sold the most.”
Club owners were not left out, as they headed to the liquor spot, where Red and Black Label were offered at a 60% discount. These club owners sell liquor such as Red Label at much higher prices.
“If you look at the stands for Red and Black Label whiskies, you will notice it is currently empty. Most of the people who cleaned them out are majorly club and bar owners and they will sell them for nothing less than N15,000,” a staff at ICM confirmed.
Other brands still in the mood for Black Friday
Maybrands, at the ICM is offering a 40 percent discount on all its wrist watches. Twice As Nice is also offering as much as 90 percent off its shirts. A visit to Mr P shop in ICM revealed that selected products, ranging from lingerie to footwear, were offered for 50 percent off.
Spar’s Black Friday 8 Sale which started on November 22nd, shows that the Indian retailer is offering mostly electronics with as much as 43 percent discounts. A visit to the Opebi outlet of Spar revealed that the usually sparse mall had a huge number of shoppers with shopping carts so filled up, that one would think there was a free giveaway ongoing.
Jumia is also having it Black Friday sales tagged, Black Fridays, which started November 2, 2018. Asides the regular discounts on products, Jumia is offering ridiculous discounts of 99 percent on selected products for each Friday in the month of November. The online shop has also selected products put up for crash sales at selected times of the day which can only be accessed via their mobile application.
Zinox Konga is not left out, as the ecommerce platform is currently having its Yakata Sales tagged ‘The Final Jara’, with products on display having as much as 94 percent discounts on their website. The sales run from November 8 to 30, 2018.
If you are yet to partake of the goodies from these shops, you might want to hurry while their offers last.
Fidelity Bank Plc must cover the chink in its curtains to keep rising
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years.
The Nigerian banking sector has consistently been one of the most profitable sectors in the Nigeria Stock Exchange market. However, in 2020, Deposit Money Banks (DMBs) have faced a flurry of impediments, which may have affected their solidity.
With reduced income from fee and commission implemented at the start of the year by the Central Bank of Nigeria, the paucity of foreign currency for international transactions, the resulting economic contraction from dire effects of the coronavirus pandemic, and the consequent operational constraints of keeping employees safe, 2020 is obviously fraught with numerous disorders for banking institutions.
For most, it hasn’t exactly been a year for growth at all, more like a walk in the woods, where improvements to bottom-line is almost unexpected. This period, many banks seem content with simply surviving and fundamentally matching their previous feats.
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years. The bank generated a 2020 9M PAT of N20.4billion, rising 7.08% from the corresponding figures last year, but drilling solely into its results in Q3’2020 and its exact comparative period in 2019, the bank suffered reduced interest revenue, reduced fees and commission, reduced profit before tax, and reduced after-tax profit.
Fidelity Bank Plc concluded Q3 with a profit position of N9.1billion, 13.7% decline compared to its position in 2019 y/y. PBT reduced by 12.9% from N10.8billion in 2019 to N9.4billion this year. Gross earning in Q3 was only N49billion as against N57billion in 2019 – plummeting 14%.
The Group Chief Executive Officer of the bank, Mr. Nnamdi Okonkwo, commenting on the result said: “Our 9 months results reflect our resilient business model, particularly in a very challenging operating environment. We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown. The drop in gross earnings was due to the decline in interest and similar income, caused by lower yields and drop in fee income.”
True cause of the reduction in earnings
DMBs generate gross earnings under three primary subheads: Interests earned, Fees and commission, and Other operating income. Fidelity Bank Plc generated a combined total of N150.8billion for the period ended September 2020 from these three categories, compared to the N158.5billion in the corresponding period last year.
Deeper analysis reveals that this rising tier-2 bank has seen more deficit in revenue from fee and commission compared to the other aforementioned gross-earnings’ generating-sources within this period. Interest earned dropped by a difference of N4.3billion, while revenue from fee and commission saw a decline of N4.8billion from N14.5billion in 2019 to N19.3billion YoY.
Fee and commission as a component of gross earnings
Card maintenance fees, account maintenance fees, commission on remittances, collect fees, telex fees, electronic transfer fees, amongst others, represent the plethora of channels that makes up income from fee and commission.
The real insight this particular component of gross earnings provides is that a spike in revenue generated indicates increasing/increased customer account activity. The more a customer maximizes the usage of an account’s product and facilities, the more the revenue earned from this segment. Thus, earnings from fees and commissions are so overriding due to their apparent controllability.
For example, a bank could make the decision to purely pursue and aggressively drive the usage of its ATM debit card and promptly see the revenue from commission rise. Furthermore, an increased rate of card production and collection necessitates usage and consequently means more money is earned as card maintenance fees.
The fact that gross earnings reduced mostly from fees and commissions should be a telling concern for the Management of Fidelity Bank Plc. Post covid-19 would birth the dawn of a new era for business processes. The management must guarantee the usability of its electronic banking channels, promotion of its cards, and with urgency, implement improved service delivery mechanisms to ensure that it is the first port of call to customers for general payments and remittances.
These measures are of grave significance in the bid to bridge its widened fee and commission income gap.
Holistically, in the 9 months ended September, it is worthy of note that the bank made certain advancements. Customer Deposits, Net Loans and Total Assets all grew in double digits. Customer Deposits grew by 22.3% from N1.2billion to N1.5billion, Total Assets also rose by 21% from N2.1billion in 2019 to N2.5billion, and Net Loans rose by 12.9% to N1.3billion from N1.1billion.
Airtel is paying up its debts
Airtel’s annual report revealed that the company has a repayment of $890 million due in May, as well as, an installment of $505 million due in March 2023.
Airtel’s presence in 14 countries from East Africa to Central and West Africa would have been impossible without relevant financial investments. But, while the funds have been key to its growth in the past few years, many of its financial obligations are starting to mature quickly.
The Covid-19 pandemic has had negative economic effects on different sectors of the economy; however, the resilience of the telecom sector is evident in an increase in Airtel’s income. The overall performance of Airtel increased with a revenue growth in constant currency of 19.6% in Q2 compared to 16.4% recorded in Q1, while revenue on reported basis increased by 10.7% to $1.82 billion, with Q2 revenue growth of 14.3%.
Unilever Nigeria Plc: Change in management has had mixed impact
9 months into the change of management, Unilever Nigeria Plc’s performance in Nigeria has been largely underwhelming.
Change in the management of a company is never a walk in the park. Transitions usually take time to yield the desired results. Organizations can look to past successful managerial transitions for inspiration, but not for instruction because there is no defined playbook. The decision to replace Mr Yaw Nsarkoh, who served as the Managing Director of Unilever Nigeria Plc until the end of 2019 was plausible, but adjustments were never going to be an easy task.
Mr Nsarkoh had served as Managing Director of the company for 5 years and steered the course of its proceedings with remarkable skill up until the financial performance disaster which culminated in his resignation on November 28th, 2019.