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Originally published by Nation Business
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business
August 26, 2026
10h ago

Businesses sacrifice profit margins to keep customers amid cost pressure

Businesses sacrifice profit margins to keep customers amid cost pressure

Companies are facing rising input bills while demand remains fragile...

✨ Key Highlights

Kenyan businesses are struggling to maintain profitability by absorbing rising operating costs rather than passing them onto consumers. This strategy aims to protect sales volumes amidst a sensitive market, leading to squeezed profit margins.

  • 37% of companies in key sectors reported higher input prices in July, primarily due to increased fuel, transport, and raw material costs.
  • The Central Bank of Kenya (CBK) and Stanbic Bank Kenya PMI surveys highlight businesses' reluctance to increase prices due to weak consumer purchasing power.
  • Despite anticipated improvements in business activity, high operating costs, geopolitical uncertainty, and the high cost of living pose significant threats to economic recovery.

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