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Discuss this article (11 Comments)Gov't offers retailers four-month licence for discounts
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 07 June 2009
SUPER SALES: Dubai government has agreed to offer one licence to retailers to cover four months of discounts and promotions. (Getty Images)
The Dubai government is granting retailers a four-month licence for discounts and promotions in a bid to shore up the city’s ailing retail sector.
Dubai shoppers can look forward to a four-month discount season starting this month, following a decision by the Dubai government to combine four different sale seasons under one licence.
These are the Dubai Summer Surprises festival, Ramadan, Eid Al Fitr and the back to school season, Laila Suhail, CEO of the Dubai Shopping Festival, said on Sunday.
“This year we have a special promotion plan for the retailers, whereby we are giving them a four month permission period,” she said.
“The Dubai Shopping Festival is one of the agencies of the Department of Economic Development and our objective is to support the retail sector, and that is why this extended promotion period will cover four different seasons.”
Retailers in Dubai usually have to apply, and pay a significant amount of money, for a special permit every time they want to hold a sale.
But as the dollar strengthened and tourism slowed, many have struggled under high rents and aggressive expansion plans that were conceived at the height of a five-year economic boom in the emirate.
The chairman of the Dubai Malls Group, Majid Al Ghurair, said that in the future, retailers could not expect the type of returns they got used to during the last three years.
Some retailers have seen a drop in sales of up to 30 percent since the beginning of the year.
“We are seeing that drop leveling off now and hopefully the summer will be a good indication for us of how things will go forward. If it’s not going to increase sales, Dubai Summer Surprises should at least stabilise them,” he said.
Majid Al Futaim, the largest developer of shopping malls in the Middle East, usually has a strong summer season, Shahram Shamsaee, a senior vice president of the group’s shopping mall division, told Arabian Business last week.
“Traditionally, believe it or not, we have a strong summer, because of the regional tourism and the climate,” he said.
READERS' COMMENTS
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@Geekay & @Thomas J, Tsk Tsk Tsk
Posted by Sand Jockey, Dubai on Monday 8 June 2009 at 23:32 UAE time
It was once said "Better to be silent and thought a fool than to open your mouth and remove all doubt.", a lesson that both of you might want to heed.
1. I, amongst my other businesses, am a retailer so yes, I do know of what I speak.
2. Nobody, and I mean NOBODY, anticipated crazy rent increases such as we've seen. So then, can you care to tell me how this could have been planned for?
3. The cost of shipping goods has NOT gone down. In fact it has gone up both due to fuel surcharges (which are still in place), lack of available transport and, funny enough, not enough containers to ship goods in.
4. We don't know what profit margins any retailer is making. We only surmise but we dont' know their costs. In fact, we are all only assuming that they are making huge profits.
5. Finally, before you both go off an another rant, remember what was originally talking about...not whether or not company x or company y were making money, but rather the stupid request for government interference when MARKET forces should dictate prices.
Gentlemen, this isn't personal, although you are making it so, rather it is simple economics. Dont' like the prices, then don't patronize the store. Sooner or later, if enough folks do so, they will get the message.
SJ
Posted by Sand Jockey, Dubai on Monday 8 June 2009 at 23:32 UAE time
It was once said "Better to be silent and thought a fool than to open your mouth and remove all doubt.", a lesson that both of you might want to heed.
1. I, amongst my other businesses, am a retailer so yes, I do know of what I speak.
2. Nobody, and I mean NOBODY, anticipated crazy rent increases such as we've seen. So then, can you care to tell me how this could have been planned for?
3. The cost of shipping goods has NOT gone down. In fact it has gone up both due to fuel surcharges (which are still in place), lack of available transport and, funny enough, not enough containers to ship goods in.
4. We don't know what profit margins any retailer is making. We only surmise but we dont' know their costs. In fact, we are all only assuming that they are making huge profits.
5. Finally, before you both go off an another rant, remember what was originally talking about...not whether or not company x or company y were making money, but rather the stupid request for government interference when MARKET forces should dictate prices.
Gentlemen, this isn't personal, although you are making it so, rather it is simple economics. Dont' like the prices, then don't patronize the store. Sooner or later, if enough folks do so, they will get the message.
SJ
permit?
Posted by paul, Dubai, UAE on Monday 8 June 2009 at 20:31 UAE time
"Retailers in Dubai usually have to apply, and pay a significant amount of money, for a special permit every time they want to hold a sale."
This is really unbelievable. On one hand the authorities are demanding supermarkets lower food prices, on the other hand they charge a significant amount of money if a retailer wants to cut prices?
So much for the business friendly free market economy.
Posted by paul, Dubai, UAE on Monday 8 June 2009 at 20:31 UAE time
"Retailers in Dubai usually have to apply, and pay a significant amount of money, for a special permit every time they want to hold a sale."
This is really unbelievable. On one hand the authorities are demanding supermarkets lower food prices, on the other hand they charge a significant amount of money if a retailer wants to cut prices?
So much for the business friendly free market economy.
Do the math before starting...
Posted by Geekay, Dubai, UAE on Monday 8 June 2009 at 17:17 UAE time
If you say rent is fixed for 5 years, fixed assets have to be amortised and staff salaries have to be paid(like they increase with cost of living.. never in proportion), then you did not do the math before opening your shop. Some of these fixed costs are clear even before you open your shop. If your business plan had already taken these into account and you had already priced your goods with sufficient margin to feed your greed for profit.. then you increase the price of your stuff only to take the effect of any additional costs which increase due to inflation. So it is very right to decrease them when the same costs go down.. like transport costs, rents (offcourse they have decreased in recent times and large business houses are in much better position to renegotiate with the mall owners)... And we are talking about the big fish who has been milking the consumer wave for years in the UAE and not about small shop set ups who have anyway disappeared or struggling not to disappear in the recent turn of events... Now you go, take a cab to nowhere and then figure.. nothing personal.. just brainstorm..
Posted by Geekay, Dubai, UAE on Monday 8 June 2009 at 17:17 UAE time
If you say rent is fixed for 5 years, fixed assets have to be amortised and staff salaries have to be paid(like they increase with cost of living.. never in proportion), then you did not do the math before opening your shop. Some of these fixed costs are clear even before you open your shop. If your business plan had already taken these into account and you had already priced your goods with sufficient margin to feed your greed for profit.. then you increase the price of your stuff only to take the effect of any additional costs which increase due to inflation. So it is very right to decrease them when the same costs go down.. like transport costs, rents (offcourse they have decreased in recent times and large business houses are in much better position to renegotiate with the mall owners)... And we are talking about the big fish who has been milking the consumer wave for years in the UAE and not about small shop set ups who have anyway disappeared or struggling not to disappear in the recent turn of events... Now you go, take a cab to nowhere and then figure.. nothing personal.. just brainstorm..
Time to lower Margins
Posted by Thomas J, Dubai, UAE on Monday 8 June 2009 at 16:20 UAE time
So Sand Jockey you say go Figure??
its not difficult to figure, the retailers have been ripping customers off for years its now time to come back to reality and REDUCE YOUR PROFIT MARGINS. or has your level of GREED made you BLIND TO REALITY.
Posted by Thomas J, Dubai, UAE on Monday 8 June 2009 at 16:20 UAE time
So Sand Jockey you say go Figure??
its not difficult to figure, the retailers have been ripping customers off for years its now time to come back to reality and REDUCE YOUR PROFIT MARGINS. or has your level of GREED made you BLIND TO REALITY.
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