Riyadh, Asharq Al-Awsat—Saudi Arabia has witnessed a more than 20 percent increase in demand for food products with the start of the Islamic holy month of Ramadan, Asharq Al-Awsat has learned.
Although Muslims are obliged to fast between sunrise and sunset during Ramadan, the Islamic holy month has consistently witnessed greater consumer spending than any other month, particularly on food. This is due to the cultural tradition of having a lavish iftar meal to break the fast, often inviting family and friends as well. As a result of this, local traders have estimated that household spending on food rises by 25 percent in Ramadan.
Abdullah Al-Othaim, chairman of the Othaim Markets Company, revealed: “Ramadan preparation raises the consumer value of food products, which also has an effect on purchasing power, which increases by approximately 20 and 25 percent as Ramadan approaches.”
He added that the volume of consumption during the Islamic holy month is estimated at SAR 20 billion.
The financial value of Saudi Arabia’s food market stands at SAR 100 billion, according to experts, while the consumer market is witnessing an approximate 5 percent increase in annual spending.
Fahd Al-Sadhan, a supermarket manager, emphasized that Saudi consumer purchasing power is on the rise, adding that this becomes increasingly evident two weeks before the first day of Ramadan. This is the period that Saudi supermarkets and stores offer the best deals and promotions to attract consumers.
Othaim claimed that the increase trade in Saudi Arabia’s retail sector is due to the high level of per capita income in the country, and the country’s increasing population.
He also made reference to the rapid growth in domestic consumption, estimated at approximately 2.9 percent annually, which is among the highest in the world.
Othaim stressed that Saudi Arabia enjoys the strongest retail sector in the Gulf, and that the Saudi retail market makes up 42 percent of the entire Gulf retail sector. He added that the Saudi retail sector is growing at a rate of approximately 3.8 percent annually.
He said, “This is not to mention the fact that the Saudi retail sector is in the top seven most attractive retail markets for global investment, owing to current and future investment opportunities, while Saudi Arabia is also the number one Arab country in the global expansion program index for retail, coming in eighth internationally.”
Othaim added that there is an overall increase in demand for food products and other perishable items during Ramadan, and that some specific products witness huge increase such as juices, dates, baked goods, pastries, and meat and poultry.
The latest Business Monitor International food and drink report on Saudi Arabia painted a positive picture for the Kingdom. Strong economic growth, forecast at 4.1 percent for 2013, is tipped to drive private consumption growth, which is projected to witness a 5 percent growth rate in 2013. This will result in a forecasted food consumption growth rate of 9.8 percent for 2013.