While Gold Souq shops see a huge drop in sales during this festive season, Dubai's hospitality industry seems to be reeling under the onslaught of the global financial crunch.
Poor sales
Gold Souq shop managers are reporting the worst sales slump in a quarter of a century as the global financial crisis deepens.
To make matters worse, the traditional Eid Al Adha rush of shoppers failed to materialise over the holidays, leaving storefront windows chock-full in a metropolis known as the "Gold City".
Twenty-five-year veteran Adel Barakat said there can be no doubt that Dubai is feeling the aftershocks of the global financial quake.
"Even the Gulf War and 9/11 didn't affect us like this," said the Iranian expatriate and Sales Manager of Barakat Jewellery. "This time is the slowest I've ever seen."
Steady decline
Barakat said since the economic crisis surfaced, sales have steadily declined to the point that traffic through his five stores in Deira's Gold Souq district has slowed to a trickle. "This is a world situation; not a local thing," he said, noting sales have plummeted by at least half. "The world economic meltdown has affected us here by 50 per cent." He said it's anyone's guess how long it will take for Gold Souq businessman to recover from the downturn.
Amish Dhanak, Sales Manager for the largest of Kanz Jewels' five stores in the Gold Souq, said sales in his firm are down by roughly one-third. He said the economic meltdown is obviously to blame and has pushed customers to be more cautious about where they spend their disposable income.
"They are safeguarding their money," said Dhanak, adding that the usual holiday rush of Emiratis was down. "If you see, we don't have any coming in. It has affected us, but not that bad."
Disappointing holiday season
Nilesh Modha, Manager of V. Mamiya Jewellery, said all souq retailers are riding out the downturn after a disappointing holiday season, which usually keeps cash registers ringing.
"November and December is usually our pick-up season but this season has been very quiet. You can't do anything right now. People don't want to spend their money because they're worried about their future," Modha said.
Vicky Soni, Manager of JM Jewels, said his store has seen a decline in sales by at least 25 per cent over last December and said the volatility of gold prices of late isn't helping matters. "Gold prices aren't stable so they are affecting gold sales."
Gold was trading at about $770 per ounce (Dh2,800) this week on global exchanges.
