Second thoughts on best buys

On a Monday afternoon Deira's second-hand salesmen were playing cricket, chatting among themselves and some even seemed to be taking cat naps. The economic slowdown and significant discounts on new goods have hit their sales in the last few months.

Dubai is not known for its extensive offerings in second-hand shops, and those that do exist say they aren't experiencing a surge in business as bargain-hunting shoppers think smarter in volatile economic times. Retailers across Dubai who have been announcing major discounts, particularly during the ongoing shopping festival and the recent holiday season, offer a new challenge as well.

"Nobody wants to buy," Reham, a shopkeeper near Nasr Square told Gulf News. He and his fellow traders lounge in their empty alley, sitting on fridges and leaning against old gym equipment. "Six months ago business was better," he sighs. "I could have taken Dh7,000 to Dh8,000 in a day - now four or five days could pass before I get a sale."

Reham and his neighbouring shopkeepers sell anything from TVs to sofas or carpets, mostly used but seemingly functional. Attempts to slash prices have not lured bargain-hunters, he said.

"I used to sell 27-inch flat screen TVs for Dh1,400 each, now people won't even buy them for Dh1,000," he said, explaining that his business is down by at least a half.

With the Dubai Shopping Festival ongoing, special offers on electrical items are so competitive that some believe this is a reason traders such as Reham are facing hard times.

"The offers are so great that those selling second-hand goods will get peanuts for them," said Jimmy Patel, general manager of retail at Jacky's electronics.

A "huge drop" in the price of used goods will be needed to attract customers at a time when new items are so cheap, Patel said.

There is also an influx in supply of second-hand goods onto the market. Farhan, who also sells electronic goods, said things have been bad for three months. He advertises in newspapers that he can pick up unwanted items. "Now they [customers] call us to come to their apartments and say 'take our stuff, take everything, we are leaving,'" he said.

But while Deira traders in second-hand goods are struggling to do any business, those dealing with a higher income class and different products say their business has not been significantly hit.

For instance, Mike McGinley, owner of House of Prose bookshops in Jumeirah Plaza and Ibn Battuta Mall says December was a good month and he didn't feel hugely affected by the economic climate.

House of Prose bookshops is giving literature enthusiasts the chance to save cash on their staple need. "December was a good month, [sales] maybe up 10 per cent," said McGinley. "But I can't say it has changed that much yet."

Still he has mixed feelings about the future and there are indicators from his business that people in tight financial situations are moving away. "I am having more of an influx of people bringing me books - maybe they are leaving the country," he said.

However, Brigadier Mohammad Ahmad Al Marri, director-general of Dubai Naturalisation and Residency Department was recently quoted as saying there will be no drop in the number of people living in Dubai. In December 2008, 86,000 new resident visas were issued and in November the number was 113,000. Resident visas cancellations were far less, according to him.

Across town in Safa Park, at the monthly flea market, demand to open stalls and supplies of second-hand goods for sale is on the up. But, the market's coordinator, Daniela Hackensberger, says there has been no recent increase in crowds hoping to pick up cheaper items than in the city's array of malls. "Things are standard," said Heckensberger. "We don't see evidence of the slowdown from the visitors."

For those selling used goods such as books, their customers tend to be those who shop in high-end consumer areas so it is desirable to find shop space in malls. But often the costs involved with renting such premises are too high.

"Here it is hard to find a good location that is affordable," he said. "Most second-hand book shops struggle to pay the rent."

The Deira traders voiced similar complaints, saying the current hit to business climate was especially harsh as rent for their shop spaces has been soaring in recent years.

If retailers continued to offer bargains on new products through 2009, thrift shops may suffer another difficult year. But consumers will remain the winners of the price competition.