Dubai: Fashion and car sales could emerge the biggest winners from the upcoming Ramadan promotions launching early April, while hypermarket retailers are preparing for the sharpest rise in demand on grocery and everyday needs from next week itself.
“This will be the first post-Covid Ramadan, and that itself is a trigger for UAE’s shoppers to buy grocery in bulk ahead of the start of Ramadan,” said V. Nandakumar, Chief Commercial Officer at LuLu Group. “There will be no supply shortages on food products because of the situation in the global shipping and logistics movements. Retailers such as ourselves have stocked in advance and have committed supplies coming through the next few weeks.
“Grocery will easily be the biggest category in the first two weeks of Ramadan because there are no more of the restrictions on social activity related to Covid.”
Ensure steady pricing – and offers
The biggest challenge for retailers will be to keep prices steady. Inflation and the steep cost of shipping are cranking up the pressure on nearly all consumer categories, and with food being no exception. According to Nandakumar and sources at other retailers, there will be extra focus on Ramadan kits of daily grocery needs at “set prices”.
“Maintaining prices will be the biggest challenge in the foodstuffs trade, and a lot of retailers have deferred any hike until after Ramadan,” said a source at one of the leading manufacturers of processed foods.
Ensure smooth post-Expo demand
UAE retailers will be hoping that Ramadan and the subsequent Eid promotions will sustain their volumes now that the Expo will close March 31. Ramadan sales, they believe, can provide the post-Expo sales bounce, especially in the second-half of April.
That is certainly what the UAE’s automotive dealerships are expecting. Car sales in the UAE has been recording a sharp recovery from the lows of a COVID-19 infected 2020, and from the second-half of last year, some of the biggest dealerships in the country are recording month-on-month sales improvements. The Ramadan promotions – equivalent to about 10-15 per cent off on the sticker price – are already starting to show up for new car sales.
Such is the demand that on some luxury models, dealerships are asking for an additional premium on top of the car’s price for anyone wanting an immediate delivery. “Sure, on some niche models there have been premiums charged in the past, but nothing like what dealerships are seeing today,” said a senior official with a dealer handling a German auto brand.
Ensure online reach
For online retailers, F&B brands and delivery portals in the UAE, this will be the start of another bumper month. More ‘virtual-only’ F&B brands will be hoping for orders and a place on dining tables. According to industry sources, this category turned in a solid performance in the last six months, and Ramadan and Eid will keep the momentum going.
So, where will the best deals be – online or offline? According to Sandeep Ganediwalla, regional Partner at Redseer Consulting, there is hardly any difference these days. Traditional retailers have upped their online game in the last two years, and can match or better any deal that online-only platforms come up with. Plus, these traditional retailers can do omni-channel too, where they take orders online and make sure the orders are picked by the shopper at a time of their convenience.
“Omnichannels account for more than 40 per cent of the online retail segment in UAE – and they are increasingly providing similar deals on both online and offline channels,” said Ganediwalla. “However, consumer perception continues to be favorable towards online deals.”
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In the UAE, e& (formerly Etisalat) and du are turning influential in this category. “If earlier shoppers would look at any ecommerce portal for smartphone picks, now, the data package offers are what usually seal the deal,” said a retailer. “This is why e& and du are turning into dominant channels, and it will become more when more subscribers sign up for 5G services.”