UAE consumers are feeling the pinch of inflation, especially while shopping for groceries, as the average price of cooking oil has increased by 20 percent and the cost of flour has risen by 40 percent, compared to the pre-pandemic prices of two years ago, according to industry experts.
Causes of this include the knock-on effect of the war in Ukraine, supply chain disruptions, and higher freight costs, according to food retailers who spoke to Arabian Business.
“Inflation rates have spiked this year in markets across the world and upward price pressure is affecting many products categories. This is due to several external factors upon which retailers can have limited control such as supply chain disruptions, shipping and transport costs, unpredictable weather, labour and production shortages, and raised consumer demand,” said Bernardo Perloiro, Chief Operating Officer – GCC at Majid Al Futtaim Retail.
“Necessary cost adjustments have affected products and categories ranging from corn and grains to meat and sugar,” he added.
Other maintain that while the impact of global inflation is something they’ve had to contend with for a while now, its causes have changed recently.
“The impact of global inflation is nothing new; it is only the causes that have recently changed. Since the early days of Covid-19, there have been major inflationary pressures from much higher freight costs,” said Tom Harvey, general manager – Commercial, Spinneys Dubai.
“We are now seeing that some of this is easing but other factors are at play. Many suppliers are facing significant cost challenges and the level of increase means that there is no option but to pass some of this on to the consumer on individual lines and brands,” he continued.
A recent World Food Programme report indicated that the cost of cooking oil is up 36 percent in Yemen, and has witnessed a 39 percent increase in Syria. Wheat flour is up 47 percent in Lebanon, 15 percent in Libya, and 14 percent in Palestine.
How consumers are coping with rising prices
Both Carrefour and Spinneys mentioned their branded products as cost-efficient alternatives to known food brands, mentioning that they’ve seen an uptick in consumer demand for these lines.
“We are however managing the impact of the rising costs by offering better value alternatives though our Spinneys branded products and are extending the scope of the range to encompass a much wider range than we have ever offered before at prices some 10 percent lower than leading brands,” said Harvey.
“We work closely with our partners and suppliers to understand the reasons behind any price increase, finding solutions to tackle this and protect the purchasing power of our customers. Not to mention, we will continue to provide discounts and promotions,” said Perloiro.
Earlier this morning, the World Bank, IMF, WFP issued a statement urging coordinated action to help vulnerable countries address growing threats to food security.
The proposed actions include providing emergency food supplies and deploying financial support to households and countries, facilitating unhindered trade, and investing in sustainable food production and nutrition security.
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