| 07 Sep 2010 |
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Businesses eye Eid sales surge
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Tuesday, Sep 07, 2010
Dubai: With Eid holidays getting closer, the leading retail houses are hoping for something more than the traditional spike in sales that usually accompanies this crucial shopping period.
All of them have mounted ambitious promotional campaigns to attract shoppers to their outlets and, more importantly, to encourage them to spend once they get there.
If all goes well and the Eid sales volumes actually turn out to be higher than anticipated, this could even set the tone for a strong start to the fourth quarter, which, according to retailers, would leave them in a win-win situation.
A major plus for retailers in recent weeks has been a discernible increase in tourist numbers within the region, which has swelled the numbers in the malls. If their numbers hold up during the last days of Ramadan, then retailers are in for a treat.
Stronger signals
"There are hints in recent weeks the market's getting a little stronger," said Ajai Dayal, general manager at the Easa Salah Al Gurg Group, which owns the local franchise to the United Colors of Benetton label as well as the Better Life home appliances outlets. "A buoyant September, that leads all the way into December, will prove the pick-up has got legs."
Which is one reason why a lot is riding on the promotions the retailers are offering during Ramadan and throughout the Eid holidays. In pure dollar terms, anecdotal evidence suggests more will be on offer at highly competitive prices during this campaign. In other words, the customer is being wooed as never before.
"The margin squeeze in the retail space has been there for some time and what retailers are trying to do is to ensure that the volumes remain favourable and do not lose their market share," said Dayal. "From that perspective, promotions are the only way to keep the shopper interested these days."
According to industry observers, the top-end of the luxury market has seen a definite upturn over the last quarter. Again it's affirmation of that time-honoured maxim that, recession or not, those who can afford to spend will definitely continue to do so.
Less inclined to shop are consumers who go for the ‘mass-prestige' brands, which in industry parlance refers to anything falling under the high premium products label and above the mid-tier items. For Dubai's retail sector to turn itself around in full, the mass-prestige category needs to get some momentum going.
"So retailers are averse to taking the risk of not going on sale. In the case of fashion merchandise, there is pressure from the principals to put the autumn-winter collections on the shelves by a certain time, and this puts [additional] pressure on retailers to sell out the inventory of their spring-summer merchandise.
"The level of discounts depend on the date when the new merchandise hits the stores and the amount of leftover stock from older collections. It is customary for stores to be discounting at this time of year."
Taking a longer term view, there will be no shortage of promotions, according to industry observers. What will change is the mixture that retailers put into them.
Depending on the merchandise, retailers may either extend a promotion or a sale to include the full collection or, if they can afford to do so, go for a part-sale.
By Manoj Nair Associate Editor
© Gulf News 2010. All rights reserved.
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