Residents face grocery price hike in 2008

Abu Dhabi: Residents find the UAE, already feeling the pinch of uncontrollable rise in prices of basic commodities, will be hit again with an increase of up to 25 per cent in their grocery bills from early next year, Gulf News has learnt.

Leading retailers have confirmed about receiving intimations from suppliers about new price hikes effective from January 1.

"A leading dairy brand has informed us that their products will be priced 10-15 per cent higher from January 1. Another popular fruit juice is increasing the price by almost 20 per cent while chicken and frozen meat products of a brand will soon cost 15-25 per cent more," said the spokesperson of EMKE group, a leading retail chain in the UAE.

'Regulate' the market

"Price hikes are happening every other day now. But we do not regulate the market prices and it is not up to us. Our company follows the policy of effecting price hikes if suppliers have obtained permission from the Ministry of Economy," he said.

Prices of all the products are expected to go up by 15-25 per cent roughly, he said. "Businesses are in dilemma," said the chairman of another popular chain of supermarkets.

"The ministry is against increasing the prices so we went to them to clarify the issue after many suppliers notified us that they are increasing the prices." Most of the products are imported so the dollar peg as well as the increasing costs of operation is not helping us, he said.

From rice to diary products to meat and confectionery, the cost of essential food products are constantly on the rise making it difficult for families to make ends meet.

"No solution seems to be in sight. The prices are constantly increasing," said P.G.K. Unnithan, a training officer. "Public sector employees have benefited from the recent 70 per cent salary hike. But for those employed in the private sector, the income remains stagnant while the cost of living is sky rocketing. It is difficult to be able to maintain a good standard of living."

According to Rajendra Aneja, CEO of a food manufacturing company, the salary hike is no permanent solution to the rising costs. "The hike has assuaged public mood and provided some relief to selected sections only. But this is purely a band-aid remedy.

"The economy has to be managed at the macro level, to nip the menace of inflation in the bud, before it strangulates the middle class and the economically weak," Aneja said. "Gulf countries cannot take the stand that these prices are a function of market supply, since the local currencies are pegged to the dollar. Otherwise local currencies should also be subject to a free float vis-a-vis the dollar," he noted.

Hitting quality of life

Roy D'Mello, a sales supervisor, said grocery bills have shot up over the past few months.

"Earlier we used to spend Dh1,000 to Dh1,500 per month on food. Now this has gone up to a minimum of Dh2,000. It is hard to make any savings in the current scenario and this affects the quality of life on a daily basis," he said.

Restaurants and cafeterias too have hiked their prices to cope with the price hike of raw materials.

"We have increased the price of dishes by two to three dirhams. We also charge for home delivery now," said a restaurant owner.

Asked if people will cut down on eating out, he said they are forced to increase the price as the cost of foodstuff has increased.

The rising cost of living is pushing us to think of moving out of the UAE.
Rehan
Abu Dhabi,UAE
Posted: December 26, 2007, 09:19

The dirham is pegged to the US dollar, which has gone down considerably. Consequently, it is dragging down the value of dirham. Now, a certain amount of dirham can't buy the same quantity it could a couple of years back. Increasing salaries is a temporary solution and somewhat neutralises the effect of rising prices only for a section of people. But the long-term solution lies in delinking the dirham from the dollar, as done by Kuwait.
Syed
Abu Dhabi,UAE
Posted: December 26, 2007, 09:04

Even few years back, grocery items had one price in all supermarkets and grocery stores. But now, prices for food items are different in different stores.
Asif
Dubai,UAE
Posted: December 26, 2007, 08:23

The prices are increasing for everything in this part of the world. I think the government should ask all private organisations to increase their staff salary.
Abbas
Dubai,UAE
Posted: December 26, 2007, 08:06

It has become difficult for middle-class people to survive in Dubai with the price of grocery increasing every month, specially milk and bakery items.
Rima
Dubai,UAE
Posted: December 26, 2007, 07:57

This is not fair! Our salaries have not increased; we are not government employees. How can we survive like this? Life is becoming more and more difficult in the UAE.
Abdul
Abu Dhabi,UAE
Posted: December 26, 2007, 07:26

I have lived in Saudi Arabia for more than two decades. There, the authorities always asked customers coming out of grocery stores if they have paid the correct price. The authorities should take some such similar action to curb unhealthy practices. Also, transport costs should be kept to the bare minimum.
Nanjundanathan
Dubai,UAE
Posted: December 26, 2007, 05:49