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Discuss this article (33 Comments)Retailers urged to cut prices to boost tourism
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 13 January 2009
TOO EXPENSIVE: A retail expert says Gulf retailers must lower prices to protect the region's tourism industry. (Getty Images)
Tourism will suffer if Gulf retailers don’t cut their prices, one of the region’s leading experts has warned.
There is no justification for prices being higher in the Gulf than they are in Europe, and retailers need to rethink their pricing structures or tourism will be hit, according to Simon Thomson, owner of retail consultancy Retail International and a founding member of the Middle East Council of Shopping Centres.
Following an article in Arabian Business that revealed prices in Dubai’s malls to be up to 50 percent higher than in the UK, one industry expert said on Sunday that a price discrepancy of 10 to 15 percent is justified, if exchange rates are unchanged.
“This is just the sort of publicity that tourists planning a shopping trip to the Gulf do not need to read,” Thomson said.
“Given that most goods - especially clothing - is sourced outside both the GCC and Europe, often from countries closer to the Gulf than say London, the suggestion that prices in the Gulf should be higher in the Gulf than Europe seems rather odd.”
After factoring in taxes, VAT, minimum wage levels, social security fees, health and safety legislation and the higher cost of energy, it is a wonder that Europe can compete with the Gulf at all, Thomson argued.
“But compete it does and my guess is that like for like items can now be bought in London cheaper than in Dubai,” he said.
“It is somewhat surprising to read that prices should cost 10 to 15 percent more in the Gulf. With no VAT to pay, this would make a mark up in the Gulf of around 30 percent over European price tags.”
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
Take a stance!
Posted by jj, Dubai, UAE on Sunday 15 February 2009 at 15:31 UAE time
Perhaps its time for consumers to take a stand. DO not purchase the luxury items and as posted by Jon, only buy the essentials where needed. Retailers need to realize and see the impact of this.
As well this is supposed to be a tax free country however the prices of goods seem to already have included a large tax factor in it.
Posted by jj, Dubai, UAE on Sunday 15 February 2009 at 15:31 UAE time
Perhaps its time for consumers to take a stand. DO not purchase the luxury items and as posted by Jon, only buy the essentials where needed. Retailers need to realize and see the impact of this.
As well this is supposed to be a tax free country however the prices of goods seem to already have included a large tax factor in it.
Dubai Ripoff
Posted by Suleman Ayub Khan, Karachi, Pakistan on Wednesday 21 January 2009 at 00:47 UAE time
The Fairytale is OVER! Dubai "once upon a time" was a place to "live Happily ever after" but this was not the case, just for the reasons that my friends have mentioned above in different comments, Dubai is going down & will continue to do so.
I Booked a Studio apartment in Dubai International City in 2004, i was given possession in late 2007, the rentals since then have been more than i ever wished for & i got a resident visa but this was all i was to get apart from these two priviliges i cant imagine moving to Dubai because of its Ripoff costs from grocery to luxuries not to mention the education, utilities & Saleks. The traffic chaos & the killing summer sun is another major down.
The recent meltdown of the boom, the global economic crisis & the mass exodous from Dubai will teach a lesson to its administrators how they should have modelled it & that the castles they built from the toil of the subcontinental people whom they treated like animals will take its toll.
Posted by Suleman Ayub Khan, Karachi, Pakistan on Wednesday 21 January 2009 at 00:47 UAE time
The Fairytale is OVER! Dubai "once upon a time" was a place to "live Happily ever after" but this was not the case, just for the reasons that my friends have mentioned above in different comments, Dubai is going down & will continue to do so.
I Booked a Studio apartment in Dubai International City in 2004, i was given possession in late 2007, the rentals since then have been more than i ever wished for & i got a resident visa but this was all i was to get apart from these two priviliges i cant imagine moving to Dubai because of its Ripoff costs from grocery to luxuries not to mention the education, utilities & Saleks. The traffic chaos & the killing summer sun is another major down.
The recent meltdown of the boom, the global economic crisis & the mass exodous from Dubai will teach a lesson to its administrators how they should have modelled it & that the castles they built from the toil of the subcontinental people whom they treated like animals will take its toll.
Rental prices are the reason prices in Dubai are so high
Posted by Andy, Taipei, Taiwan on Friday 16 January 2009 at 08:57 UAE time
One of the biggest factors of retail prices being so high in the Dubai malls is due to the rents being charged. To say the least is that their rental rates are no less of a monopoly than their telecom company Etisalat is.
It is actually cheaper to buy stuff in places like Egypt, Syria and many other countries than it is to buy stuff in Dubai. I find Dubai a complete rip-off in the malls for shopping. Most retail prices are far more expensive than they are in Europe and in Hong-Kong. There should be no reason prices are so high when there are no import duties and while employee wages are at nearly half of what they are in Europe or most parts of Asia.
It may be cheaper to get fuel and buy cars in Dubai but the government more than makes up for it by gouging the people with telecom rates, rental rates, utility rates, toll fees, visa/residency fees and community fees on homes purchased.
Posted by Andy, Taipei, Taiwan on Friday 16 January 2009 at 08:57 UAE time
One of the biggest factors of retail prices being so high in the Dubai malls is due to the rents being charged. To say the least is that their rental rates are no less of a monopoly than their telecom company Etisalat is.
It is actually cheaper to buy stuff in places like Egypt, Syria and many other countries than it is to buy stuff in Dubai. I find Dubai a complete rip-off in the malls for shopping. Most retail prices are far more expensive than they are in Europe and in Hong-Kong. There should be no reason prices are so high when there are no import duties and while employee wages are at nearly half of what they are in Europe or most parts of Asia.
It may be cheaper to get fuel and buy cars in Dubai but the government more than makes up for it by gouging the people with telecom rates, rental rates, utility rates, toll fees, visa/residency fees and community fees on homes purchased.
Dubai Prices
Posted by Jon, Dubai, UAE on Thursday 15 January 2009 at 10:35 UAE time
I only buy day to day essentials in Dubai now. The place is such a rip off and I make any "major" purchases outside of Dubai. I just bought THREE suits in London for less than the price of ONE in Dubai when I compared the prices for the same suit. It just reinforced my belief never to buy here as it is cheaper to fly to London and buy the same!!
...oh, that's not flying Emirates of course, as they are more expensive than any other carrier as well!!
Posted by Jon, Dubai, UAE on Thursday 15 January 2009 at 10:35 UAE time
I only buy day to day essentials in Dubai now. The place is such a rip off and I make any "major" purchases outside of Dubai. I just bought THREE suits in London for less than the price of ONE in Dubai when I compared the prices for the same suit. It just reinforced my belief never to buy here as it is cheaper to fly to London and buy the same!!
...oh, that's not flying Emirates of course, as they are more expensive than any other carrier as well!!
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