How UAE retailers limit the impact of inflation on customers

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Top retailers in the UAE have announced plans to launch aggressive advertising campaigns and set up independent sourcing offices around the world to limit the impact of price increases in the Emirates.

Retailers like Lulu Group International and Al Maya Group have taken robust measures to ensure customers don’t feel the hardship as commodity prices rise around the world.

V Nandakumar, director of marketing and communications at Lulu Group International, said the company has set up independent sourcing offices in food hubs such as the US, UK, Turkey, Italy, Spain, Egypt, South Africa, India, the Far East and Colombo. He said the group has put the infrastructure in place to minimize the cost impact caused by third-party involvement from dealers and importers.

“These are key countries from which food is imported, and we have built our infrastructure within the supply chain so that we can get the best price and enjoy an uninterrupted supply of products,” Nandakumar said.

Similarly, Al Maya Group group leader Kamal Vachani said they are working with governing bodies such as the Food Corporation of India (FCI), the Agricultural and Processed Food Products Export Development Authority (APEDA) and organizations within the UAE government to ensure food supply ensure.

“We are also looking for alternative product sources in the event of supply chain disruptions. For example, as there is an ongoing wheat ban from India, we are trying to import wheat from Turkey instead. We are working very closely with the UAE Ministry of Economy to ensure there is no direct impact on customers,” Vachani said.

Food prices in the UAE and around the world have risen mainly due to high freight rates, oil prices and the ongoing military conflict between Russia and Ukraine.

In the first quarter of this year, UAE inflation rose 3.35 percent on higher prices in 11 main sectors. The country’s consumer price index (CPI) rose to 102.70 points in Q1-22, compared with 99.37 points in the same period last year.

Two days ago, UAE Economy Minister Abdullah bin Touq Al Marri said the country is doing everything it can to limit the impact of global price surges and inflation. He said commodity price hikes are a global challenge and the ministry has “well-researched policies and plans” to curb unjustified hikes in the country’s markets.

He said the ministry is managing the issue by “trying to balance consumer interest in sourcing goods at reasonable prices on the one hand and ensuring the sustainability of supply on the other”.

Nandakumar added: “We are working very closely with the authorities to ensure we have sufficient stocks of essential supplies for six months to a year.”

“Furthermore, we are always looking for ways and means to control prices so that consumers are not taxed on goods, especially basic necessities,” he added. The company also heavily promotes its own-brand products, which are more affordable than competing brands.

“The products sold under the Lulu brand are 25 percent cheaper than other brands. Also, we run daily, weekly and monthly promotional campaigns for high quality products,” he said. Shoppers can shop during these promotions to get the best deal.

A similar approach is also followed by medium-sized suppliers and supermarkets. Abdul Rasheed Parakkal, the managing director of Azhar Al Madeena Hypermarket said: “We have not increased our prices at all. Instead, we launched weekend promotional campaigns selling bulk products at a bargain price. Additionally, all of our sourcing takes place locally. Global supply chain disruption doesn’t affect us that much.”

Vachani also said: “We are working according to the instructions and guidelines of the Ministry of Economy. We want our customers to be happy and satisfied, and for that to happen everyone needs to take initiatives to reduce the impact on prices.”

He added: “One of the biggest challenges we face is the supply of oil and wheat products. India is one of the largest suppliers of grain to the UAE. As we are currently facing a disruption, we have taken immediate action to ensure supplies are coming from other countries. We do not take such issues lightly.”

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