SR 30 bn consumer spending forecast this Ramadan

The volume of Saudis’ consumption of consumer goods is expected to reach SR 30 billion during Ramadan, according to economic experts. Expressing alarm over a steep price hike of some products in the local market, they attributed the greed of some traders to this phenomenon. Speaking to Alsharq newspaper, they urged consumers to boycott such products and choose instead alternative brands of consumer goods. Salem Baajaja, professor of accountancy at Taif University, said that Saudis normally spend about SR 15 billion during Ramadan, but this year it was expected to double to SR 30 billion by the end of the holy month. “During the holy month, even low-income people buy quantities of goods that are almost double to the quantity that they buy in other months of the year, and these included goods that are both essential and nonessential. There are virtually no real discounts for goods in the market,” he said. According to Baajaja, the recent price index, released by the Ministry of Commerce and Industry, showed that there was an increase in the prices of 18 goods. “This rise in price is unjustifiable, especially in the wake of the depreciation of the euro against the dollar,” he said. He also drew attention to an expected increase of 30-50 percent in the volume of consumer goods purchased by families during the month of Ramadan, as compared to other months of the year. “They buy huge quantities of foodstuffs during Ramadan and eat only a portion of them and throw the rest in the garbage,” he said. Ahmad Al-Zahrani, executive director of a retail establishment, said that there is a huge demand for some consumer goods such as the pastry for making sambousek, along with ingredients for sweets, cakes and soups marketed by his firm during the holy month. Similar is the case with several other consumer goods. He said that the owners of some commercial centers and grocery stores came out with Ramadan offers for products such as fruit juice and cooking oil for which the profit margin is very low and then steeply raised the price of other products to cheat the consumers. Al-Zahrani stressed the need for consumers to have an enhanced awareness about such foul play. “The Ministry of Commerce and Industry and various municipalities are strictly monitoring  the market situation and taking penal action against those engaged in price fixing and charging unreasonable prices for some goods,” he said. Osama Falali, professor of economics at King Abdul Aziz University, said that the hike in prices of some consumer goods are artificially generated. “There is no justification for this excessive hike in prices except for the greed of traders. Depreciation of the euro against the dollar should have resulted in falling prices of many consumer goods during Ramadan, but this is not the case. Some retail traders attribute the price hikes to huge demand and low supply but this is neither true nor convincing,” he said. Falali also rejected justifications for these price hikes by linking them to the rapid growth of the population. “Population growth would result in a hike in the prices of goods in a gradual way over a few years and not within days or weeks,” he said, while underlining the need for changing the purchasing culture of Saudis. Wasif Kabily, member of the food traders’ committee at the Jeddah Chamber of Commerce and Industry, said consumers must shoulder the responsibility of bringing down the steep hike in the prices of goods. “The value of currency is in favor of falling prices of many consumer goods. In this scenario, consumers should boycott those products whose prices have been hiked unreasonably,” he said.