Leading supermarkets in the UAE are keeping the prices of essentials stable even as shipping costs and regional issues continue to plague the supply chain. Houthi rebels have continued to attack cargo ships and tankers traversing the Red Sea — the world’s busiest trade route — since late last year, in retaliation for Israel’s war on Gaza. This has impacted the supply chain severely.
However, supermarkets in the UAE have ensured that prices of staples remain unchanged during the holy month of Ramadan. Some admitted that maintaining the prices may only be possible as a short-term measure.
“We have instructed all our suppliers to not increase prices and are working to ensure prices are stable,” said Shabu Abdul Majeed, director of retail operations, Lulu Group. “We have introduced private label, high quality products that offer total value for money to our shoppers. All through Ramadan, we have decided to keep prices of essential products fixed and offer about 60-70per cent discount on food and other grocery items.”
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Supermarket chain Choithram is also offering discounts for the month. “Due to Ramadan and our 50th anniversary celebrations, we have introduced a whole new range of promotions across all our stores in the UAE,” said Rajiv Warrier, CEO of T. Choithrams and Sons. “We expect the prices to be stable at least in the short term. If interest rates come down, it will support us in mitigating the cost increase due to freight and other factors.”
Many ships are now travelling through the Cape of Good Hope, a more time-consuming and expensive route.
Local supermarket chain Spinneys has also held off any kind of price rises. “We have not had to make any price adjustments due to the current regional situation,” said a spokesperson.
“We have seen a slight rise in shipping costs, but it hasn’t been anywhere near what we have seen in the past, for example during the Covid-19 pandemic. We mitigate cost increases in our supply chain by using alternative freight methods, where available.”
New source markets
As the attacks on the Red Sea and regional political issues continue, some have decided to look for new source markets to overcome issues.
“Keeping in mind the current challenging situation, we have started sourcing more from South Africa, China and the Philippines to avoid the Red Sea route that has been facing challenges,” said Shabu.
“We are working very closely with our suppliers, vendors and distributors as well as our own sourcing offices across the world in the US, Europe, India and Far East to ensure prices remain stable.”
Rajiv said the issues have highlighted the vulnerability of supply chains, particularly for sea freight goods but Choithrams is able to navigate it. “Our company benefits from a diversified network of suppliers,” he said. “With multiple sources of supply, we are better equipped to navigate unforeseen challenges and maintain continuity in our distribution efforts.”
He added that the company has been proactive in looking for alternatives. “When faced with disruptions, we take swift and decisive action to address the situation, whether it involves sourcing alternative suppliers, rerouting shipments, or adjusting our inventory management strategies,” he said.
Ensuring food security
Some supermarkets like Spinneys are turning to local farmers. “By partnering with local farmers, we reduce transportation costs, reduce food miles, strengthen the local economy, and promote food security,” said the spokesperson. “We are committed to maintaining a balance between international sourcing for products that our customers are loyal to, as well as supporting local producers.”
Choithrams has been anticipating an increase demand to ensure timely delivery. “We have started placing the orders in advance and giving quarterly forecasts to our suppliers to ensure the increase in delivery,” said Rajiv.
Meanwhile, Lulu has six months’ supply in stock at all times. “As a key stakeholder of the food security of this country, we know that it is important to always have enough food in our warehouses and that is what we continue to do,” said Shabu.