The effect of Ramadan on the retail sector

23 Apr, 2019 - BCB

Ramadan Effect

While it’s easy to imagine the month of Ramadan as a freeze on most business transactions, the holy month actually sees increased activity in some sectors in the UAE. The retail industry is one such sector, particularly the Food and beverage industry, as people stock-up their homes in preparation for the fast.

It is common practice for retailers and manufacturers to provide heavy discounts during this period as many consumers shift from buying in bits to making bulk purchases. These promotional offers – by one get one free, free gifts and extra volume- drive the hypermarkets and supermarkets during Ramadan. According to Nielsen, food sales increase by approximately 10% during this period with packaged food driving the growth. Other food categories with exceptional growth include beverages, juices, dates, soups, condensed milk, dry desert and oat meal.

Alms and gifting are also big parts of Ramadan; several corporates send gifts to their clients while charity organisations share food & gifts on the road, and mosques. Thus, boosting demand for gift items such as homeware, apparels, hampers, and chocolates.

The Ramadan period is also a time during which friends and families connect and celebrate, going out to eat and shop during the evenings. Most restaurants offer food deals to encourage families, friends and co-workers to eat-out during Iftar. Restaurants with e-commerce platforms as well as those listed on search engines also benefit during Ramadan; analysts estimate that there is a 35.8% surge on e-commerce platforms during the Ramadan period. This reemphasises the need for shopping convenience consumers prefer, and desire during Ramadan.

The Ramadan period ushers in increased prosperity and happiness for businesses in the retail space, and residents in the UAE.

To take advantage of the Ramadan surge, it is important to note that most buying decisions are done in advance; usually at the start of the new year. Hence, it is important to look beyond not just the regional events like Gulfood  to promote products and brands but to be strategically and continuously promote your product as the brand to choose to retailers.

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