Dubai: It’s back-to-school shopping season, as retailers roll out discounts and bundle offers to try to lure consumers.
August is a strong sales month for retailers that sell back-to-school items, such as backpacks and pens. But other retailers find that sales soften during the month.
“August is a critical month for companies that rely on back-to-school sales as a significant part of their annual revenue … overall, August is not a particularly strong retail sales month … we see an overall softening in all retail sectors,” said Colin Beaton, managing director of retail consultancy Limelight Creative Services.
In August, many residents are away on holiday and tourists, who account for a large portion of sales for many retailers, arrive in the country in smaller numbers due to the heat. While hot weather does drive consumers to air-conditioned shopping malls, most are there to socialise rather than shop, Beaton said.
Nikola Kosutic, research manager at consultancy Euromonitor International, said a quarter of annual writing instrument sales in the UAE are generated during August. Consumer electronics also take a big share of back-to-school spending, he said.
Beaton expects spending in August to be flat or slightly lower compared to the same period a year ago. He did not say how much consumers are expected to spend on average on back-to-school items this year.
The growth of the UAE retail market has slowed down this year amid currency devaluations and the lower price of oil.
The weaker euro and rouble against the US dollar, to which the UAE dirham is pegged, has reduced the number of visitors from the Eurozone and Russia.
Retail sales in the UAE are expected to grow by 6.3 per cent for the full year compared with 2014, slightly lower than the 7.5 per cent growth in 2014 from 2013, Kosutic said.
Even so, consumer confidence is high, Beaton said.
“Consumer confidence still remains quite high but there is some caution coming into the market and it is in all sectors,” he said.
A report by consultancy Nielsen showed that consumer confidence dropped in the second quarter of this year. The consumer confidence index fell by seven points from the first quarter to a score of 108 due to declining sentiment about job prospects and personal finances.
Kosutic said that the level of discounting this year is higher than last year due to macroeconomic factors.
On Babyshop’s back-to-school offers, Ruban Shanmugarajah, general manager at the company, said: “We have introduced many value offerings wherein parents can buy an entire Back to School collection set starting from Dh79.”
Nikhil Chaturvedi, marketing manager at Shoe Mart, said: “Shoe Mart shoppers can instantly save 10 per cent discount when they buy a pair of Bare Feet or Juniors shoes plus a school bag and a pack of socks.”
