By Staff writer
Retailers asked to slash costs on basic foodstuffs, have two weeks to present discounts
The UAE’s economy ministry called on retailers to slash
costs of basic commodities by 20-50 percent during the Muslim fasting month of
Ramadan, Al-Bayan reported on Tuesday.
The world's No.3 oil exporter has avoided unrest that hit
nearby Oman, Bahrain and Yemen. However, concerned about the turmoil, the UAE
has said it would spend $1.6bn to improve infrastructure in less-developed
The Gulf country has also raised military pensions by 70
percent and introduced bread and rice subsidies.
"The ministry has given all selling outlets a period of
two weeks to present their final offers for [prices of] commodities during
Ramadan," the daily cited Hashem al-Nuaimi, head of consumer protection at
the UAE economy ministry, as saying.
"[The ministry is] advising that the discount offers
range between 20 and 50 percent," he said.
The government also instructed retailers not to impose
additional fees on credit card payments as of July 1, Al-Bayan said.
Rising food prices have become hugely sensitive around the
world, helping to fuel protests that toppled rulers of Tunisia and Egypt
earlier this year, with unrest spreading across North Africa and the Middle
Food prices usually soar during Ramadan, which starts in
August, as families enjoy more elaborate evening meals after the daylight
Last month, the UAE government said it planned to combat
rising global commodity prices by fixing the cost of about 400 foodstuffs and
household products at 70 outlets in the second largest Arab economy.
Annual inflation in the OPEC member edged down slightly to
1.1 percent in April from 1.2 percent in the previous month.
Food costs, which account for 14 percent of the UAE consumer
price basket, jumped 1.3 percent month-on-month in April after a 0.4 percent
drop in March.
You can ask for it but it ain't going to happen. In fact, food prices (as every Ramadan) will go up. It is an issue of Demand, Supply and Greed.
Margins in retail are already very low. The large stores tend to make their money by renting shelf space to suppliers, rather than from the price of the product. A supplier will reduce the shelf space required in Ramadan rather than submit to a loss. To expect a 50% "gift" of a price reduction means that retailers are expected to make a loss on items or to share the pain of reduced prices with the suppliers.
Most staff except those in the retail industry work less in Ramadan for the same salary. Now there is an expectation that the stores, who have to stay open later and pay staff more in salaries and benefits, will take a loss on the products they sell.
I've always found it slightly ironic how Ramadan, the Holy Month of FASTING, is so food-focused and in fact, probably more food is consumed during that month than during the rest of the year.