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Tue 24 Nov 2009 07:44 AM

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UAE grocery sales growth slumps in 2009

New report says consumers cutting back has made it a 'humbling' year for retailers.

The growth of mass grocery sales (MGR) in the UAE has slowed dramatically in 2009 as consumers cut back amid the impact of the global economic crisis, a new report has revealed.

Following years of double-digit growth to 2008, Business Monitor International's UAE Food and Drink Report for Q1 2010 said it saw growth this year at just 3.3 percent.

"The year so far has been a humbling one for some of the country’s leadings retailers, as consumers have been forced to rein in spending," the report said.

BMI added that leading hypermarket and supermarket retailers like EMKE Group and Spinneys Dubai have had to review their pricing byplacing a greater emphasis on value.

But the research company said that both remained well placed to capitalise on a forecast 33 percent increase in headline MGR sales to AED7.28bn ($1.98bn) through to 2014.

"While consumers have undoubtedly lost some of their appetite for premium products, the downturn has not curbed the structural development of the MGR industry, which is still less developed than most comparably high income states," BMI added.

Through to 2014, BMI said it expected industry wide convenience store sales to outperform wider MGR sales, strengthening 54.5 percent to AED0.43bn.

"Despite weaker near-term demand for premium products, a strong forecast recovery (we expect GDP growth to register 3.6 percent in 2010) and untapped multi segment store launch potential continues to provide opportunities to existing retailers," the BMI report added.

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Sayed Ali 10 years ago

Spinneys imports goods from Europe, specifically Waitrose and the customer has to foot the import costs. 500g of Tenderloin cost me nearly 40Dhs. Their prices are very high, the only reason i even use spinneys is geographically it's easier accessible. But seriously, they need to reduce their prices, as most things in there are extortionately high, even their fruit and veg. The one good relatively cheap product they do well is bread. Other than that, they are terrible

AlexT 10 years ago

Yiha, another expert's opinion that has nothing to do with reality... So, let's see this one, the "growth" had nothing to do with the influx of bodies/mouths in the country but it was all doen to the brilliance of the Supermanagers of these companies, right. So the downturn has nothing to do with the reduction of the population then......so let's keep the supemanagers to realise the 5years forecast (despite their 3 years visa) Wake up and smell the Colombian Blend, less people = less sales, keep it simple stupid........

R. VENKATARAMAN 10 years ago

When the income is not increasing, and the expenses are going up, it is natural for the people to reduce their purchases. Though the consumption cannot reduce, the middle / lower middle class look for economical alternatives, which definitely bring down the turnover of the supermarkets. The EMKE Group has also knowingly or unknowingly reduced the quantity of various items, such as Dhalls - pack of 800 gm instead of 1000 gms/400 g iso 500g. People are used to buy one big pack, without looking in details; the cost is not changed, which means an increase in price of 20%. Similarly, LACNOR started filling up their 200ml packs with 180ml, which other Juice / milk cos have started following; the price has slightly gone up or remain at the same level. Hereagain, the price increase in 20%. Many items are reduced in size, so that the customers are not feeling the real price increase. Fortunately, this has helped the customers to reduce their intake, which is helping them in the long term, to remain fit / less intake of sugar, etc. We used to use two packs of Lacnor juice for the child, we continue to use the same pack, but his consumption is reduced by 20%, which is really good.

Harry winston 10 years ago

Jaffa cake in the UK- 25 p Jaffa cake at Spinneys Kahlidyah- 24 dirhams jaffa cake ar LULU in Mussafah-8 dirhams So, whos the loser who shops at Spinneys!!

Handy 10 years ago

we recently switched to doing our weekly shopping at worldmart in arabian centre and our bill is almost half... goodbye to shopping at spinneys where some items are around double the cost of elsewhere.. sorry guys you lost a customer for life... too greedy