Choithram has joined forces with the Ministry of Economy to fix the prices of 17 basic food items at its supermarkets across the UAE for the rest of the year.
The decision was based on the need to tackle to issues “which may appear to be problematic, but have a quick fix solution,” said Manoj Thanwani, director, T. Choithram & Sons.
Prices have been frozen on products including Mara baked beans, Bytco’s wheat flour, Al Wadi frozen chickens and Rosanna chickpeas.
“The discount varies product to product, however certain commodities have a discount of up to 40% compared with normal retail,” he commented.
“Due to volatile oil prices, fluctuations in global currencies, shortages in commodities and rising costs of raw materials, we have taken adequate measures to tackle pricing policies by renegotiating with vendors locally and globally,” he said.
Last year the UAE witnessed a 10.7% rise in inflation due to higher rents and the cost of inland haulage jumped domestically and overseas. “Port charges added to the problem, which inflated the prices on FMCG and groceries by almost 40% this year,” Thanwani said.
He predicted the move would discourage rivals from “rising prices and taking advantage.”
In stark contrast, “the items offered by us are high demand products due to their quality and brand awareness as opposed to other retailers” and “the prices will be even further reduced if the same is reflected in the current market”.
The initiative generated “an extremely high level of customer satisfaction, resulting in additional foot traffic for each store. We are generating loyalty from consumers who previously would have shopped elsewhere.”
“Spot buying of goods, due to high volume consumption generated by our supermarkets, allows us to ensure availability and a consistent pricing policy for at least three to four months; hence subsidised margins will have a minimum impact on our organisation”, he explained.”
Asked whether the retailer has worked with key vendors to subsidise from its margins, he said “it is customary for all the trade partners to have a contract in place, stipulating a 90 day period of price prefix before any hike is absorbed. Choithram’s 900,000ft² distribution centre enables us to hold products which would be in demand”.
“Certain vendors who are unable to abide by the same are facing the consequence of being delisted at our stores, resulting in an opportunity for others to grow market share,” he added.
The company’s presence in 27 countries will enable it to “constantly monitor price fluctuations for goods required by our organisation or for our associates across the globe.
“We constantly have to spot buy currencies due to dramatic fluctuations in the exchange rate, which have been seen in the past year,” he added.
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