29 May 2017
Consumer spending is expected to go into overdrive during this year's fasting season, analysts say

By Cleofe Maceda, Senior Web Reporter

Dubai: The fasting period may have already kicked off, but the shopping spree isn’t really over for retailers in the UAE. With millions of UAE residents expected to hit the grocery aisles and shops, as well as restaurants and cafes at sundown this week and over the next several days, overall consumer spending will see a healthy rise of 15 per cent to 30 per cent.

The ninth month of the Islamic calendar started on Saturday and Muslims around the world are expected to refrain from eating or drinking between dawn and sunset. That doesn’t mean, however, that consumers don’t open their wallets throughout the period.

James George, analyst at Euromonitor International, said there is a 15 per cent surge in spending on food and non-food items during the season, as retailers entice shoppers with promotions and Iftar gatherings lead to higher consumption of food. Residents also tend to splurge on presents for their loved ones this season.

“Ramadan is clearly a month of high consumer spend especially on food items. Iftars tend to be elaborate with the invitation of friends and family over, also in addition to gifts that are bought during this season,”  George told Gulf News.

“Retailers become more aggressive with their Ramadan promotions by offering steeper discounts, with consumers waiting for this period to splurge.”

Non brick-and-mortar retailers will see an even higher uptick in sales, as consumers also have the tendency to shop online during Ramadan.

“It has been observed that e-commerce and mobile-commerce tend to rise during the month with an average increase of 30 per cent across various categories, as consumers tend to browse and purchase non-food items online. This trend is also in line with the increased spending through debit and credit cards during the month,” added George.

An earlier survey by Souqalmal.com showed that consumers spend more than usual during the fasting season, with 78% of the polled residents in UAE saying they exceed their budgets during Ramadan.

More than a third (34 per cent) said they tend to spend an excess of Dh1,000 to Dh3,000 more than their usual budget, while about 16 per cent spend at least Dh3,000 more.

Figures released by Visa also showed that its debit, credit and prepaid cardholders across the Middle East and North Africa spent $9.3 billion during Ramadan 2015. Card spending in the UAE reached $2.9 billion, about 31 per cent of the total spend for the region.

© Gulf News 2017