Dubai Forums Dubai Discussions Dubai General Chat

Its funny how we are supposedly in recession ... rents are supposed to have dropped.. yet I went out to day and fancied a shawarma from this joint i go to regularly .. it used to be 3.50 and now its 4.. well thats only 50 fils i think and Im on my way to get me hair cut.. I finish the hair cut at my regular salon ... it used to be 35 and 5 dhs tip now he tells me its 40 for the cut and im thinkin shall i be bastard and not tip him.. however the concience kicked in and i gave him his fiver anyways ..... Salaries goin down ... people getting laid off and expenses goin up .... slowly but surely .... be wary everyone

What's Dubai's inflation rate for this year?

Suppose it's hard to judge because of us being in a time when things went up and down so much.

My food delivery place charges an extra 5 dhs now, and I think Marlboro lights are 7.50 from the Last Minute place near me now, although maybe they are just rip offs. Used to be 6 dhs when I lived in Tourist Club last year.

check this out..

http://www.thenational.ae/article/20090 ... 99757/1010

The price is stated in dirhams, but the sales tag also shows the retail price in other parts of the world. And for the UAE consumer the markup can be considerable.

An investigation by The National shows that local outlets for some of the world’s best-known shopping chains are marking up prices by 70 per cent or more.

The evidence is hanging from the items themselves: the original price in the currency of origin and the local cost. Among the worst examples were a pair of girl’s jeans with a 78 per cent mark up, a photo frame with a 70 per cent mark up and a birthday card that was more than twice the original cost.

Store owners defend the high prices, citing transportation costs and excessive rents and the need to balance discounted items. But some analysts believe they have gone too far. Others say it is a simple matter of supply and demand.

Naeem Ghafoor, the chief executive of Skyline Retail Services consultancy in Dubai, said while import charges might be seen as an added expense, retailers in the UAE are exempt from the taxes applied in many parts of Europe and North America and enjoy lower labour costs.

There’s no problem with charging more money, but it’s how much more you charge,” he said. “In my opinion, prices that are 10 to 15 per cent more expensive are acceptable. If you are over that you are ripping off the public.”

Examples included a lamp at Debenhams in Dubai that was tagged at £18 (Dh106), but marked up to Dh150, a 42 per cent increase. A birthday card at Gulf Greetings in Dubai was labelled at US$1.99 (Dh7.30), but sold for Dh15, more than double the local price.

A pair of men’s leather shoes at Marks & Spencer in Dubai was labelled £59.50 (Dh352) but sold for Dh450, a 28 per cent markup, while a frozen pack of Iceland cod fish cakes at Lulu Hypermarket in Abu Dhabi labelled at £1 (Dh5.90) sold for Dh10.

Even so, Mohammed al Shihi, the director general of the Ministry of Economy, said market competition in the UAE kept retail prices in check. He attributed price disparities to additional costs of doing business in the Emirates and fluctuating currency exchange rates.

“This is under market control, and people can choose between different varieties here,” he said.

Mr Ghafoor agreed the shifting currency exchange rate could be a factor because retailers paid for stock orders as much as a year in advance, making it difficult for retail prices to reflect the latest currency values.

However, there was still an unusually large gap in prices between countries for certain products.

Because the dirham is pegged to the US dollar, the exchange rates between the two currencies are stable. Yet, a Hallmark family photo album tagged at $20 (Dh73.40) for US consumers was sold at Gulf Greetings in Dubai for Dh125, a 70 per cent markup.

Even if using the highest exchange rate in the past year – Dh7.35 for every pound sterling in July 2008 – a pair of girls’ jeans at Tammy in Dubai labelled at £16 should cost no more than Dh117.60. At current rates, it would be only Dh95. Yet, the jeans were recently priced at Dh169, a 78 per cent markup, although they have since been reduced to Dh126 in a storewide sale.

Ian Johnson, Hallmark’s marketing representative for the Middle East, said retail prices were set by the local retailer based on several factors, with “rent being the most significant”. Mall rents, he said, exceeded “those comparable in the US by a significant factor”. He also attributed the price difference to air-freight costs.

Shailesh Mehta, the brand manager for BHS and Tammy in Abu Dhabi, also cited freight, duties and high rent as factors driving prices higher than they would be overseas.

“Whatever the customer pays over there, we can never get that,” Mr Mehta said. “In some cases you will lose, in some cases you will win. You can never get the equation right.”

Mark Morris Jones, the senior director for retail and industrial property in the Middle East and North Africa with CB Richard Ellis, discounted the influence of high rents, maintaining that the cost of prime retail real estate in the UAE was far cheaper than the best shopping districts in London.

“Like for like, the best retail pitch in the UAE would be on par with a reasonably sized provincial city in the UK,” he said.

Mr Mehta said prices were based on what the market would bear. In some cases the company will take a loss because the customer expects to pay low, he said. In other cases, it can charge more. “We apply different prices where we can fetch that price,” he said. “When we lose somewhere, we have to make it somewhere.”

Robert Ziegler, the vice president of AT Kearney management consultancy in Dubai, said consumer goods should cost less in the UAE because of the absence of a sales tax and the UAE’s low import tariffs.

At the same time, he pointed out consumers still had a choice not to buy from retailers with high markups. “If they can get higher prices in the UAE for the same product, then that is fair,” he said of the retailers. “It may not seem fair for the consumer, but the buying power in the UAE is much higher than anywhere else.”

Nandakumar, the corporate communication manager at Emke Group, which runs LuLu Hypermarkets, said local food retailers could not offer prices similar to those in which the goods were produced. In addition to import costs, he said, food must be shipped, cleared, labelled in Arabic and English, certified according to UAE regulations, all of which add costs.

“We are importing this for a niche market,” he said. “These are not essential products. The person is aware they’re paying a slight premium because there is a lot involved in getting the product here.” Natasha Tulsi, the marketing manager for Marks & Spencer in the Gulf with the local franchise holder Al Futtaim, said it was impossible to charge the same prices in the UAE as in the UK because the company did not have the same profit margins. Al Futtaim must pay more for products from Marks & Spencer as a franchisee, than what it cost to bring stock to stores in the UK, she said.

But Ms Tulsi said Marks & Spencer in the UAE had saved money with the falling sterling exchange rate and had permanently cut its retail prices by 10 to 40 per cent to pass on the savings to the customer.

“It’s very important for the brands at the end of the day to answer to the customers,” she said. “If you’re not true to them, it’s failing customer service and lowering the brand value.”

Even with the added expenses, prices should be no more than 20 per cent higher than elsewhere, she said.

But Tamara Keenan, a 33-year-old teacher who lives in Abu Dhabi, said she found that many branded items were much more expensive in the UAE. Even on sale, the prices are just on par with what she pays overseas.

That's a known fact long ago even before the recession. Comparing prices in Dubai to the prices in the region especially in taxed territories.

Retailers here are just greedy!

Captain Australia wrote:What's Dubai's inflation rate for this year?

Suppose it's hard to judge because of us being in a time when things went up and down so much.

My food delivery place charges an extra 5 dhs now, and I think Marlboro lights are 7.50 from the Last Minute place near me now, although maybe they are just rip offs. Used to be 6 dhs when I lived in Tourist Club last year.

Inflation was around 11 percent in 2008 and is expected to be near 5 - 8 percent in 2009.

An added burden comes from the the dollar peg. Recently the dollar lost ground against other currencies (ex. 1 euro = 1.41 dollar) and this makes it more expensive (in dirhams) to buy/import commodities/products since they are charged in dollars worldwide.

So, products will get more expensive in the end. What I read in the article is perhaps a trick from importers to get the yield up in times of downturn. So they simply charge too much compared to Europe.

This comes in their own pockets. Perhaps European Commissioner for Competition Neelie Kroes (firm Dutch woman) should be appointed as new regulator secretary in the GCC region against price controls.

That would be fireworks in the GCC region under her rule

RobbyG wrote:Inflation was around 11 percent in 2008 and is expected to be near 5 - 8 percent in 2009.

An added burden comes from the the dollar peg. Recently the dollar lost ground against other currencies (ex. 1 euro = 1.41 dollar) and this makes it more expensive (in dirhams) to buy/import commodities/products since they are charged in dollars worldwide.

So, products will get more expensive in the end. What I read in the article is perhaps a trick from importers to get the yield up in times of downturn. So they simply charge too much compared to Europe.

Officially inflation may be 11% or whatevr.
Those living here would know that 2008 heralded unprecedented rises in inflation.
The official CPI does not take into account rent and education and I think health care as well. So there is no way that could be an accurate indicator of expatriate expenses.Even if one discounts rent, essential goods too witnessed a sharp increase that would easily go way beyond 11%.

Everything else you said is bang on target.

My bone of contention is, retailers. Don't they have any hedge against fluctuating foreign exchange? Sheesh! That is reason enough for them to employ me!

Misery Called Life wrote:

RobbyG wrote:Inflation was around 11 percent in 2008 and is expected to be near 5 - 8 percent in 2009.

An added burden comes from the the dollar peg. Recently the dollar lost ground against other currencies (ex. 1 euro = 1.41 dollar) and this makes it more expensive (in dirhams) to buy/import commodities/products since they are charged in dollars worldwide.

So, products will get more expensive in the end. What I read in the article is perhaps a trick from importers to get the yield up in times of downturn. So they simply charge too much compared to Europe.

Officially inflation may be 11% or whatevr.
Those living here would know that 2008 heralded unprecedented rises in inflation.
The official CPI does not take into account rent and education and I think health care as well. So there is no way that could be an accurate indicator of expatriate expenses.Even if one discounts rent, essential goods too witnessed a sharp increase that would easily go way beyond 11%.

Everything else you said is bang on target.

My bone of contention is, retailers. Don't they have any hedge against fluctuating foreign exchange? Sheesh! That is reason enough for them to employ me!

And you are bang on as well. The average rent was about 50 percent of ones income in the UAE last year. So this recession comes as a gift from heaven for people, especially in the lower wage ranges.

Of course, the official numbers I talk about, are NOT reality on the floor. Government always keeps their fence brightly coloured. But the current official numbers are coming closer to reality then in recent years, due to price deflation in certain sectors.

wow its amazing how much information is available... i wasnt even aware of all the figures and its just staggering .... its true about the tags hangin off the items though .. one would think that if your going to steal u might want to cover your tracks.... but there in lies the irony .... its such a farce
Dubai began its cosmopolitan jump with a tourism boom supproted mainly by Emirates airlines and the shopping festival.. Dont know if you remember but Emirates used to give free visit visas during shopping festival in the haydays to encourage people to shop here... i believe back then people used to come in from europe gorging on designer ware like ck and d&g claiming it was a lot cheaper here!!!!!!
I can only attribute it to greed over the years ... covered up by inflation stories .. the truth though is greed ...
UAE really is the only place where people will pay anything for anything...
Where else could you sell desert for 7 - 10 million per unit and still make the buyer believe that hes got a steal !!!!
The lack of control in terms of governing prices and extreme credit available have taken it to such a crap situation ... it really makes me sad as Ive seen the good life too years ago. it used to be a land of opportunity truly once .. now its just a bunch of thieves extorting you in every way imaginable and unimaginable!!!

dig this....

my regular takeaway joint used to give a complimentary salad with all ordered dishes. One fine day, I get a medium sized container with just

1) two small slices of cucumber and
2) one slice of onion

Hows that for recession measures?

wonder if it gets worse and wel end up with just the onion ring ....

well i guess everyone are having recess while on recession to check out the figures from the newspapers to the actual retail prices on the market itself.

true that most of products in here are more expensive than other parts of the world, except probably car and petrol.

one reason because of monopoly practice.
second is because most of them are imported, consider also transportation cost, 5% import/customs tax, storage cost, and distribution cost. especially for fresh fruits and vegetables flown by airplane from europe/asia.

bedro wrote:That's a known fact long ago even before the recession. Comparing prices in Dubai to the prices in the region especially in taxed territories.

Retailers here are just greedy!

Could not agree more.

I've bought dress shirt's at Espirit before for $49.99 + tax (14%)
Here, the same shirt retails around 400 dhs.

Am I missing something?

well this is what we all going to face it!.. i have paid my driver 1500 n now he's asking for more 200 hundred dirham's... not fastrated as he's not wrong becouse of recession!...I mean you know!.. but the question is .. was that would be end here or thing's will going to be bad more!....

Sharp wrote:well this is what we all going to face it!.. i have paid my driver 1500 n now he's asking for more 200 hundred dirham's... not fastrated as he's not wrong becouse of recession!...I mean you know!.. but the question is .. was that would be end here or thing's will going to be bad more!....

You will find you can get one cheaper now, plenty of people looking for work.

sage & onion wrote:

Sharp wrote:well this is what we all going to face it!.. i have paid my driver 1500 n now he's asking for more 200 hundred dirham's... not fastrated as he's not wrong becouse of recession!...I mean you know!.. but the question is .. was that would be end here or thing's will going to be bad more!....

You will find you can get one cheaper now, plenty of people looking for work.

Ahh!... belive me that would be a New's for me!......

michaeldubai wrote:dig this....

my regular takeaway joint used to give a complimentary salad with all ordered dishes. One fine day, I get a medium sized container with just

1) two small slices of cucumber and
2) one slice of onion

Hows that for recession measures?

B*tch at them dude, I did with mine and now I again get all the salad, raitas, etc that I used to. If you're a regular they need you! and it costs them peanuts. It's a case of 'do you know who I am....?' (private joke, please don't say that!)

My regular pizza place has started giving free garlic bread and a cans of coke - sweet!

wow!.. i coming to get the deal!... off-course that's Sweet!!......