Soaring prices of essential goods bite into consumers' pockets

Soaring prices of essential goods bite into consumers' pockets
By Irish Eden Belleza, Staff Reporter GULF NEWS Published: February 13, 2008, 00:20

Dubai: As 2008 began, UAE consumers have been crying over skyrocketing prices as basic commodities have become more expensive in many places in the past few months, posting increases as high as 25 per cent.



Increases in consumer prices are not unique to the UAE.

It is a worldwide phenomenon caused by soaring agricultural prices and the global economic slowdown, triggered by the lingering crisis in capital markets.

Solutions

Some retailers of fast-moving consumer goods (FMCG) are consequently coming up with innovative solutions to ease the burden on consumers.

"Most of the goods sold here are imported. But at LuLu Centre we are now producing our own range of goods such as frozen foods to give consumers an alternative and offer them more value for their money," Ashraf Ali, executive director of the LuLu chain of hypermarkets, told Gulf News.

Due to pressure from suppliers to raise prices, some retail outlets are suffering severe shortages of basic commodities.

"We are experiencing a 40 to 50 per cent shortage or reduction of goods like rice, milk, dairy products, poultry and especially imported goods," said Ashraf Ali.

"Suppliers are asking for price revisions but we are not implementing them since the suggested price increase has not yet been approved by the Ministry of Economy," the official added.

Inflation

Inflation is expected to intensify over the next couple of months as, industry experts have revealed, consumers are confronted with more price hikes in basic commodities ranging from 20 to 40 per cent.

An industry insider also revealed that the UAE market is experiencing severe shortages of products produced by some multinationals.

However, some lucky consumers may have to take advantage of the current lull in price increases of many consumer goods that remained stable.

Choice

The latest consumer price index released by the Ministry of Economy indicates that consumers must be careful where they shop.

For instance, one kilo of cheese (Akkawi) from the Czech Republic has risen to Dh34.90 in some supermarkets, but is available for as little as Dh23.95 from others.

Butter from Denmark costs Dh7.95 for 400g in some stores while some others offer it for Dh7.75.

Most of the goods sold hereare imported. At LuLu Centre we are now producing our own range of goods such as frozen foods to give consumers an alternative and offer them more value for their money," said Ashraf Ali, Executive director of LuLu chain of hypermarkets.