UAE retailers have been quick to confirm fixed-price strategies through Ramadan on food and non-food essentials. Image Credit: Supplied

Dubai: UAE hypermarket operators and food commodity retailers in the UAE are focusing on keep prices constant where possible during the Ramadan phase, and ensure that consumers do not feel the need to hold back on spending because of inflationary-led price gains.

In this regard, major retailers have expanded the scope of ‘fixed-price’ promotions through the next few weeks. At Lulu Group, “This Ramadan, we have 200 products where prices will remain the same,” said V. Nandakumar, Director of Marketing with the Abu Dhabi headquartered retailer. “In the past, we typically kept constant pricing on about 100 products as part of the Ramadan campaign.

“We made the change to 200 because we noticed slight shifts in consumer spending even on daily/weekly essentials, especially food purchases. We have dealt with inflationary price increases in the best way possible by keeping prices constant on most food items.” (On the non-food side too, the strategy is being followed on what could constitute as essential purchases during Ramadan.)

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Having fixed costs on 200 products this Ramadan does mean we had to cut our margins. But with inflation and prices increases weighing on shoppers' minds, this had to be done

- V. Nandakumar of Lulu Group

Tackle costs

Other supermarket chains too have got into the swing of things for their own Ramadan promotions, by tackling the cost factor. Not surprisingly, straightforward discounts remain the most popular option, while there are banks offering cashback opportunities on grocery spending done through their credit cards.

But cost spirals remain a heavy concern for businesses. Last week, the UAE authorities allowed retail prices on eggs and other poultry products to be increased ‘temporarily’ after fielding requests from local producers on the steep increase in costs at their operations. And that without end-user prices being increased, it could result in more losses sustained by the businesses.

According to retail industry sources, the hike on egg and poultry prices is a one-off, and as has been made clear by the authorities, this is being seen as a temporary measure.

On imported food staples, retailers say that the still strong dollar makes inward shipments into the UAE manageable. “Plus, shipping costs have come down drastically since October 2022, and that also eases the pressure on prices for the UAE consumer,” said one food trader.

Food price inflation has been a running issue for UAE and Gulf consumers through these three years, first brought on by Covid-related supply disruptions. Image Credit: Supplied

Major Ramadan campaigns are on

The Ramadan-related promotions, especially from supermarket and online marketplaces, have been running for a few days now. According to Kamal Vachani, Group Director at Dubai-based Al Maya Group, the early start always helps with the bulk buys made before the actual start of Ramadan.

“We strategized in-store offerings with three major promotion cycles,” said Vachani. “The pre-Ramadan bulk purchases and deals, and then once Ramadan starts, the emphasis naturally shifts to repeat purchases, with offers on top up buying.”

“Then the promotions focus on the ‘deep offerings’ towards buying vital products and the best possible deals on Eid purchases.”

Retailers have to prioritize how they run their Ramadan promotions, with the first stage focusing on the heavy bulk buying of essentials by shoppers

- Kamal Vachani of Al Maya Group

Stock up more

Also, where possible, food importers and wholesalers are opting to place higher orders to ensure there are adequate supplies at all times. “Placing higher orders means more costs – but we have learnt the lessons of having sufficient stocks at all times,” said one trader. “We foresee a heavier spending pattern through the next few weeks and lasting beyond Eid. We need to be prepared for the shopper rush.”

Shoppers in the UAE preparing for the start of Ramadan this week already are already into the buying and stocking.