Abu Dhabi Co-Operative Society GM sends out stark warning on inflation-beating measures in the UAE.
The initatives implemented by UAE retailers to hold last year's prices on staple food items last month were 'Band Aid' solutions, according to the general manager of Abu Dhabi Co-Operative Society.
"These are Band Aid solutions. Are we going to absorb the shop? Retailers Carrefour, Union Coop and Lulu Hypermarkets have agreed to freeze prices but consumers don't know which products they're talking about, as they haven't indicated the affected products in-store.
They have selected products that you cannot compare on price, they are not international brands," blasted Georges M.J. Mojica to Retail News Middle East.
He argued that if the industry opts for cost price on products, "some of the retailers will close down, as we are not subsidised by the Government, we are private companies."
Consumer education is a key concern for the chain, Mojica said. "It's important for consumers to understand that we are with them. Inflation is hurting them, like it is hurting us."
Abu Dhabi Co-Operative Society has selected 258 items to buy and sell at cost price. "We are making any profit on them, and has selected basic products such as rice, coffee and tea.
"We have been doing this for a few months, in fact as soon as problem with inflation started the Government urged the Abu Dhabi Coop's board of directors to create solutions for it, and they all responded very positively to this idea."
The wide spectrum of nationalities in the UAE capital has resulted in different levels of impact on shoppers, he said, yet "those who have rice as their main food item have taken a big hit."
Private labels should be pushed as realistic remedies to combat inflation, and Mojica stressed, "there is not a shortage of food. Private labels are a lot cheaper than international brands, and consumers can opt for promotional products all offering different quality, origin and retail prices."
He questioned "is the Government going to step in and subsidise staples?" The Government in Saudi Arabia has introduced cost of living allowances and welfare payments, tightened bank lending curbs, boosted subsidies and slashed import levies to offset the impact of price rises on its 25 million people.
Inflation in Saudi Arabia could cross 10% this year, which would be the highest level since at least the 1970s when Gulf economies boomed on soaring oil prices, the Kingdom's central bank governor Hamad Saud al-Sayyari announced recently.
"What the UAE Government should be doing is controlling the international products coming into the market from the importers. They have all of the documents with customs, and should question how much are they bringing in, what is the cost and keep a tag on that," Mojica suggested.