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Thursday, June 1, 2023

UAE retailers offer fixed prices on more products this Ramadan to ease shoppers’ concerns

DUBAI: Hypermarket operators and food retailers in the UAE are working to keep prices as constant as possible during Ramadan and ensure consumers don’t feel compelled to curb spending due to inflation-driven price increases.

In this regard, major retailers have expanded their “fixed price” promotions in the coming weeks. At Lulu Group, “this Ramadan, we have 200 products whose prices will remain the same,” said V. Nandakumar, the Abu Dhabi-based retailer’s marketing director. “In the past, as part of our Ramadan campaign, we usually kept the same pricing on around 100 products.

“We changed it to 200 as we noticed a slight shift in consumer spending on daily/weekly essentials, especially food purchases. We did this in the best possible way by keeping the prices of most food items constant Deal with inflationary price increases.” (On the non-food side, the strategy is also seen as a necessity during Ramadan.)

In this Ramadan, the cost of 200 products is fixed, which does mean that we have to cut our margins.But it must be done as inflation and rising prices weigh on shoppers

– V. Nandakumar, Lulu Group

solve the cost

Other supermarket chains are also starting to prepare for their own Ramadan promotions by addressing the cost factor. Unsurprisingly, straight-forward discounts remain the most popular option, while there are also banks offering cashback opportunities on grocery purchases done with credit cards.

But spiraling costs remain a serious problem for businesses.Last week, UAE authorities allowed egg retail price “Temporarily” increasing production of other poultry products following demands from local producers for a sharp increase in their operating costs. Failure to increase end-user prices could result in more losses for businesses.

According to retail sources, the increase in egg and poultry prices is a one-off and, as the authorities have made clear, is seen as a temporary measure.

In terms of imported staples, retailers said the dollar remained strong making imports into the UAE manageable. “Furthermore, transportation costs have dropped significantly since October 2022, which has also eased price pressure on UAE consumers,” said a food trader.

Major Ramadan events underway

Promotions related to Ramadan, especially from supermarkets and online marketplaces, have been going on for several days. Kamal Vachani, group director at the Dubai-based Al Maya Group, said an early start always helps with bulk purchases before Ramadan actually begins.

“We strategize in-store offerings through three main promotional cycles,” Vachani said. “Bulk purchases and deals ahead of Ramadan, and then once Ramadan starts, the focus will naturally shift to repeat purchases and discounts on purchases.”

“The promotions then focus on ‘in-depth offerings’ to buy important products, as well as the best prices for Hari Raya shopping.”

Retailers must prioritize how they run Ramadan promotions, with the first phase focusing on shoppers buying essentials in bulk

– Kamal Vachani, Al Maya Group

Stock up

Also, where possible, food importers and wholesalers are opting to place higher orders to ensure there will always be sufficient supplies. “Placing more orders means more costs – but we have learned the lesson of having enough stocks at all times,” said a trader. “We expect spending patterns to be heavier in the coming weeks and continue beyond Eid. We need to prepare for a shopping frenzy.”

Emirati shoppers are already shopping and stocking up as they prepare for the start of Ramadan this week.

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