Who says fasting's bad for business? Food sales in UAE to grow during Ramadan
A Pakistani Muslim man arranges Iftar food for Muslim devotees before they break their fast during the holy fasting month of Ramadan in Karachi on June 30, 2014. (AFP/Asif Hassan)
Food business in the UAE is expected to see good times ahead, with local retailers anticipating a ten to 15 percent rise in sales during the period of Ramadan and all the way through Eid.
Studies have shown that consumer spending, particularly on food and beverages, tend to go up a few days before the start of Ramadan until the Eid celebration.
The month-long period of prayer and reflection for Muslims is expected to start in the third week of June, when consumers will refrain from eating during the day. After sundown, it is customary for families and friends to gather for Iftar and celebrate the end of the day's fast with dinners or banquets.
Considering the change in consumer behaviour during Ramadan, analysts said it is mainly packaged food consumption that sees an uptrend, aided by Ramadan-specific promotions and launches, while other consumer categories are normally down.
"Typically food categories show growth during this period but not personal care categories. It is actually one of the busiest times of the year for food manufacturers and there are several initiatives, for example promotions, Ramadan-specific launches and other initiatives that are visible in the market place," said Abhik Gupta, managing director, consumer products group, Nielsen Middle East, North Africa and Pakistan.
Gupta said that sales in the package food sector normally register a growth of 10 to 15 percent during Ramadan.
"While sales in a country like UAE is also governed by externalities like tourism and expat employment, we see the packaged food business grow during the period of Ramadan,” Gupta gold Gulf News.
"Typically, this would span a couple of months since Ramadan purchases would commence a few days prior to the start and extend up to the end of Eid."
The rise in food consumption is also observed in other markets like Indonesia, where growth in sales value of consumer goods could go up by 9.2 percent during the festive season.
"A majority of consumers will abstain from eating during the day. But that hardly means [consumers] will spend less on food and beverages," Nielsen said in an earlier report on Indonesian food spending.
"The festive season means it's time to entertain and connect with friends," the report said.
Among the consumer items that are popular during the season are concentrated juices, powdered beverages, dry desserts bouillons, laban and pastries.
"[These products] show exceptional growth during this period. Our consumers understanding indicates that there are certain dishes or types of food which are associated with Ramadan and the food habits during this period," Gupta said.
"In fact, it might be interesting to note that there are certain brands which are also strongly associated with Ramadan and this period could account for more than half their yearly sales."
Kamal Vachani, director of Al Maya Group, which operates a number of grocery outlets in the UAE, said they expect ten to 15 percent increase in their sales during Ramadan.
"We see a significant increase in sales of food and other groceries in our stores. The products that are in demand during the holy month of Ramadan are dates, wheat flour, oil, meat, fruits and vegetables," Vachani told Gulf News.
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