The Ramadan effect: Ramadan: Time to score some savings

Saturday, Aug 14, 2010

Gulf News

There’s no doubt business flattens out every summer, when many locals and expatriate residents leave the Gulf to its languid torpor and tourists choose to holiday in tolerable climes.

With fewer people in town and recession-wary residents still holding on to their wallets, retail and tourism sectors can expect consumer spending to falter.

This summer, however, may be different. Religious duty and tradition, not just the economic climate, are dictating the summer holidays.

It is Ramadan, a period of spiritual discipline for devoted Muslims across the region. The month-long observance is synonymous with sumptuous pre-dawn and sundown banquets, and re-establishing ties with families and friends.

With Ramadan falling early in August, just right after the curtains fall on the annual shopping and entertainment extravaganza, Dubai Summer Surprises, some merchants still have something to cheer about.

“Certainly, many people leave Dubai for the summer which will surely affect consumer spend,” Kim Perks of Euromonitor International says, but Ramadan is sure to “positively affect sales.”

Not everyone will reap the benefits, though, so there will be losers and winners. Merchants are aware that the business stakes are high during this season, and many are willing to play the game.

Reeling from the seasonal drop in occupancy rates, hotels are capitalising on Iftars and suhours, and flooding the market with special room packages at the same time.

Also eyeing to increase their takings are tent operators, restaurants, caterers and other food service businesses, and of course, supermarket chains.

Malls and non-grocery retailers are getting in on the act, as well. As daytime consumption slows down and is replaced by increased nightlife, retail hours are altered, offering shoppers more time to browse the stores in the evening.

Certainly, competition in the market is tough, which is why Ramadan offerings take on a more creative approach, too. Just a few days ago, one of Dubai’s jewellers (Pure Gold) unveiled its new collection of diamond pendants especially crafted for the fasting month. Each pendant, accented with diamonds and engraved with the word “Allah” in Arabic, are on sale for Dh999 to Dh1,999.

Even financial firms are not to be outdone. A UAE-based bank (Rakbank) is trying to lure more clients by offering residents the chance to buy new cars without the need for a down payment and first loan repayment for 90 days.

Great deals

In the “spirit of giving”, the bank is also granting “automatic instalment deferment” to customers with personal loans and SME loans (small and medium sized enterprises), as well as those with existing auto loans.

Consumers generally increase their spending on food during Ramadan, so the gainers this season are likely to come from the grocery retail and hospitality sectors.

Given the stiff competition among local businesses, fiercely-driven promotions will be a major feature in the next few weeks. Besides, as one UAE resident puts it, everyone is encouraged to be especially generous at this time of year. There are plenty of great deals to be had.

So, for the business-minded, Ramadan can be a good time to cash in, and, for consumers, an opportunity to score some savings.

CONSUMER?FINANCE

Reeling from the seasonal drop in occupancy rates, hotels are capitalising on Iftars and suhours.

By Cleofe Maceda?Staff Reporter