Shops ring up bumper Ramadan sales

Shoppers browse at the Ramadan Night Market in Dubai World Trade Center, which is open from 8pm to 3am until August 19. Razan Alzayani / The National

Retailers across the country are predicting scorching summer sales this Ramadan - despite the Holy Month falling in the hottest period of the year when tourist numbers are traditionally low.

In a poll by The National, 12 of 15 retail executives and analysts questioned said revenues would be higher this Ramadan with retailers having already reported record sales growth for the year. Jewellers, electronics shops, clothing retailers, mall operators and online stores are all forecasting bumper profits.

"For us and electronics, it's been pretty good, particularly because there's some aggressive promotions that we are running," said Amit Malani, the president of Harman Middle East, an audio and electronics specialist.

"I think Dubai has had a trend in the last four years that every single Ramadan becomes better than last year. For the last four years it's been like that."

Harman Middle East closed its yearly reporting season at the end of June, with sales increasing more than 30 per cent to US$300 million (Dh1.1 billion) across the region. It is now aiming for more ambitious growth, predicting sales of $400m in its next calendar year.

The huge numbers of tourists in the UAE have contributed to the increases in sales for many retailers so far this year. But as overseas visitors have slowly trickled off during the Holy Month, residents have picked up the slack, boosting sales in malls and restaurants across the country.

"The UAE's retail industry will definitely see sales growth during the current Ramadan festive period," said Ruban Shanmugarajah, the general manager for Babyshop, which has stores across the UAE. "In fact, it is one of the strongest trading periods for a number of the retail segments within the industry like grocery, fashion and gifting solutions providers."

Dubai Duty Free recorded an 8 per cent increase in sales to $62,500 in the first 18 days of Ramadan, on a 10 per cent increase in transactions. "The sales are high on gifting items across all categories especially perfumes, cosmetics, delicatessen and confectionary," said Saba Tahir, the vice president for purchasing at Dubai Duty Free. "The sales of Arabic sweets and dates are noteworthy during Ramadan when compared to rest of the year."

Malls have also reported high numbers of people escaping from the summer heat, which has converted to spending in the shops.

"Footfall to our centres has been consistently strong throughout Ramadan," said Fuad Al Najjar a senior director of shopping malls for Majid Al Futtaim Properties, which operates six malls in the UAE, including Deira City Centre and Mall of the Emirates.

"Ramadan is generally a quieter period for the retail landscape. However, sales have been consistent for this time of year and we are already witnessing a boost in activity as we are nearing the Eid festivities."

There were some retailers who were less sanguine about the prospects for Ramadan and said sales in the first couple of weeks had been slow as people spent time with family.

But most executives were confident shoppers would pour into stores ahead of the Eid Al Fitr celebrations.

"For the first days, revenues show no sign of increase but we are confident that the next two weeks will make up for this," said Ishwar Chugani, the executive director for the Middle East at Giordano, which has plans to have a total of 250 outlets in the region and India by 2015.

"The Holy Month of Ramadan is one of the most important periods of the year in the Middle East markets. All retailers, especially apparel retailers, witness a growth during this period as the consumers are out shopping for new clothes for Eid."

Although executives expected sales to increase during Ramadan compared with the same time last year, some also said the timing of this year's Holy Month would mean sales growth rates were not at the heady heights seen in other months so far this year.

Eidfalls in the middle of the hottest month of the year, which executives said would mean many potential shoppers would celebrate the holiday abroad.

"As Ramadan came in July, which is the peak of the summer shopping, business has been affected as many expatriates have left for the holidays earlier and there is a reduction of GCC and other tourists coming in," said Mr Chugani.