Dubai: Shopper demand may have been slow to start off with, but some aggressive price cuts by retailers in the UAE is setting up Ramadan sales for a rousing finish by the Eid Al Fitr holidays. Price slashes - by 15-30 per cent - have extended to the latest smartphones and electronics, while demand for grocery and F&B deals continue to run hot.
Retailers say this weekend should see another spending surge even as government staff prepare for salary credits that have been brought forward on account of Eid. Shoppers should also be on the lookout for some last-week-of-Ramadan deals, and throwing off much of the caution that has held back spending levels in the first quarter of 2023.
“Smartphones and electronics could be the biggest category winners in the next few days,” said a retailer. “Shoppers are finally being convinced the latest Ramadan promotions are good enough to warrant spending on a product upgrade now rather than wait for after summer.”
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Many of the promotions are being done with an eye on picking up sales from those UAE residents who will be taking trips for the coming holidays. Apart from gadgets, fashion and accessories is the other category getting a lift from pre-travel spending.
Gold and jewellery is the one category that has slid down on the spending side, as consumers kept away from prices at $2,020 an ounce (UAE gold rate is Dh226.25 a gram). Expectations that prices would drop ahead of the holiday trips have been dashed for many residents.
Drop caution, start spending
With the Eid holidays having been announced today (April 13), retailers are ready for shoppers to free up their wallets. “We have the stocks and the right prices,” said a luxury fashion retailer. “The buyers are ready too, and we are expecting some extra sales pick up when other GCC visitors turn up to spend their Eid here.”
A new update from the insurer group GIG says that nearly half of GCC residents expect to pay more for Eid gifts than last year. “A majority, however, will hold out for Ramadan in-store events and special offers before making their purchases,” the statement added.
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In GIG Gulf’s estimates, that’s nearly 75 per cent of GCC residents postponing purchases to wait for special offers during Ramadan - and Eid. This is why many retailers are holding back their last flurry of promotions to the final few days.
“Unless it’s grocery or F&B, it’s better to time Ramadan promotions during the latter half of the Holy Month,” said a retailer. “Start too early and the offers could get lost as many shoppers make adjustments to their daily routines.”
Price freeze proves a winner
As was widely expected before the start of this Ramadan, the UAE government’s move to ensure retailers kept prices in check on food and other essentials (apart from that on eggs and poultry) helped direct buying trends in the grocery category during this period. (The authorities also fined those retailers who went over and above prescribed prices on eggs and poultry.)
In addition, hypermarket operators increased the tally of products that would see a price free during the course of Ramadan.
Even then, prices of eggs might have played on shoppers’ minds. Since the start of this Ramadan, their demand did slip as did that for dairy products, according to data from Tradeling, the B2B platform. In contrast, pantry items such as vegetable oil ‘continue to be highly popular’.
Last year, ‘pantry inventory, beverages such as soft drinks, and dairy and eggs items were among the most ordered product categories’, the report adds. (The most popular order last year on Tradeling during Ramadan was ‘Mabrook Vegetable Oil’ while ‘Jenan Paratha Maida’ occupies the top spot currently.)
“Data shows that 54 per cent of shoppers in the UAE and Saudi Arabia use e-commerce sites to discover ideas for Ramadan and Eid Al Fitr purchases,” the report states. “Analysis of supermarkets in these countries has accordingly found that during the first week, and a week before the first week of Ramadan, the highest number of promotions and user engagement with them is recorded.
“As a result, sales for FMCG typically spike by 6 per cent in the UAE and 11 per cent in Saudi Arabia.”
UAE roads thrum to new car beats
Talk to UAE car dealers and they exude a sense of satisfaction of having passed through a good month for sales. Even if many of the car deliveries were on bookings placed two- or three months ago. Check out the roads and highways, and this will confirm the presence of new registrations – quite a lot of them.
And whatever numbers dealers did during Ramadan sets them up nicely for the soon-to-start rollout of the next round of launches.
All in all, the Ramadan period shows the UAE retail sales – including online, of course – in a good place. All that’s required is for this to keep rolling on further.