Consumers seek Ramadan bargains as UAE ups subsidies

By Eliot Beer

- Last updated on GMT

Photo: iStock
Photo: iStock

Related tags: United arab emirates, Food, Uae

Saudi, UAE and Egyptian shoppers are prepared to switch brands for a bargain even as they increase their food spend during Ramadan—a time when the UAE Ministry of Economy pays US$68m on food subsidies.

Research from YouGov in the three countries confirmed high levels of planned spending for the holy month, with 53% of respondents expecting to spend more overall, and 93% planning to spend more on regular household purchases, including food. Dates, laban, yoghurt and powdered or concentrated soft drinks—all Ramadan staples—topped the list of products people planned to buy more of. 

No room for loyalty

Alarmingly for food producers, 40% of those surveyed said they would always shop around for the best deal with no brand loyalty at all, while 38% said they would remain faithful to favourite brands only if they offered deals. Only 22% of respondents said they would stick to their preferred brands no matter what. 

Consumers’ preferred promotions included discounts and price-offs, chosen by 78% of respondents in total, in contrast to bulk-buy offers. YouGov suggested the perishability of food products made them less suitable to bulk offers. 

It is evident that although there is an increase in consumption and expenditure during Ramadan, consumers’ purchase patterns differ according to the type of product they are buying, which impacts the offers they look out for. Brands need to take cognisance of this fact and design the right promotions tailored to specific product categories  in order to stand out from the crowd and win the fight for consumer attention​,” said Pranay Dandekar, head of consumer research for YouGov in MENA.

Research earlier in the year by GfK for Facebook suggested that consumers start to plan holy month food purchases well ahead of time, with 47% of UAE survey respondents planning their cooking for Ramadan up to a month before it starts. The research suggested brands need to be visible to consumers well ahead of time to make an impact.

UAE boosts food subsidies

Before the start of Ramadan, the UAE Ministry of Economy announced it would increase food subsidies to US$68m this year, to allow supermarkets and co-operatives to cut the price of around 5,000 food items by up to 70%. The ministry noted it had also agreed year-round price controls on another 4,000 items with suppliers and retailers.

According to Hashim Saeed Al Nuami, director of the Consumer Protection Department at the Ministry of Economy, the UAE will see daily food imports rise by around 30% during Ramadan, with imports into Dubai reaching 18,000 tonnes a day, and 4,000 tonnes a day into Abu Dhabi. 

With food price inflation remaining high in the UAE, reaching more than 3% in April, government-subsidised price cuts are broadly welcomed in the country. But some residents still claim to see price gouging despite potentially stiff penalties, while many smaller retailers struggle to cope with the required discounts, according to local media reports.

Related topics: Markets, Supply chain, Middle East

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