Business | Retail

UAE retailers see increased spending this Ramadan

Eid weekend is expected to draw a lot of consumers in search of attractive gifts

  • By Naushad K. Cherrayil
, Staff Reporter
  • Published: 17:48 July 23, 2012
  • Gulf News

An electronic store in Deira City Centre with the Ramadan offers
  • Image Credit: Ahmed Ramzan/Gulf News
  • An electronic store in Deira City Centre with the Ramadan offers.
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Dubai: Ramadan is the time when consumers spend more money than any other month during the entire year.

It is the time when residents buy consumer goods, household and spruce up their homes to host lavish family get-togethers and Iftar gatherings.

Therefore, it is no wonder that demand for everything including household items, food and clothing hits an all-time high and retailers scramble to keep enough stock during the month.

“There has been a rise in consumer confidence and in retail sales in the last few months. Customers are spending more on new gadgets. Ramadan is also a period when people residing within the UAE and those visiting from GCC countries spend more on home appliances and many families do up their homes,” said Nilesh Khalkho, CEO, Sharaf DG.

Despite decline in tourists, most retailers see increased spends from locals and Arab expats in the UAE during the holy month as several stores are opened even past midnight.

According to Niranjan Gidwani, Deputy CEO, Eros Group, Ramadan sales are usually a bit slow. However, as the holy month moves into summer it overlaps with Dubai Summer Surprises as well as the holiday season, sales will continue briskly albeit in a subdued manner.

With DSS occurring just before Ramadan, retailers do not expect television sales to be robust this year compared to last year, but expect mobile phones and laptops to witness brisk business.

As demand for small domestic appliances is good in the initial part of Ramadan, the attention is focused on groceries and electronics that help in food preparation and preservation.


Exclusive offers

“We expect significant increase in sales during Ramadan due to our exclusive offers and customers will get up to 20 per cent cash back on selected home appliances,” said Neelesh Bhatnagar, CEO at EMax.

Appliances are a very crucial category during summer. “We expect summer favorites like refrigerators and air conditioners to continue doing brisk business. The local weather also provides brisk sales in air purifiers which is a growing category. Ramadan also sees increased sales in cookers, blenders for juices and vacuum cleaners to keep the house clean,” Gidwani, Khalkho and Bhatnagar said.

Ramadan tends to be a slightly quieter period for sales, said Ashish Panjabi, Chief Operating Officer at Jacky’s Group of Companies. This year, with Ramadan fasting hours being longer, “we expect to see most activity in the malls only during the late evenings so the window to shop will be shortened even though we’re open for the entire day,” he said.

The tourist traffic also tends to drop during Ramadan as many GCC visitors that normally visit the UAE also avoid traveling during this period.

“We tend to see a jump in sales for cooking products in the pre-Ramadan season, especially gas cookers, deep fat fryers, blenders, juicers and meat mincers. Chest freezer sales also tend to pick up during this time of year,” Panjabi said.

Some companies across the Middle East reportedly spend as much as half their advertising budget during Ramadan alone.

Jacky’s and Jumbo Electronics expect to have more offers during Eid period when there is a certain amount of gifting that happens.

“There are too many events too close to each other and it is difficult to bring genuine offers each time,” Panjabi said.

The first half will see a slight dip in sales as “people adjust to the long fasting hours during summer. After the initial adjustment period people do warm up to the late night visits to malls where attractive retail promotions lure buyers who intend to go with the season of giving,” said Sachin Wadhwa, Director – Electronics, Al-Futtaim Group.

Retailers plan attractive product discounts and gift vouchers, especially during the second half of Ramadan and also over-lapping with the Back-to-School period. The Eid weekend draws a lot of consumers in search for attractive gifting ideas. Towards the end of Ramadan demand focusses on the gifting ideas.

Wadhwa said the overall gain can be expected to be in the range of 5 per cent to 10 per cent compared to same period last year.

Eros expects sales to rise by at least 30 per cent compared to last year while Sharaf DG sees double digit growth compared to last year.

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