The cost of a weekly shop is due to fall across the country after the Government launched a major campaign yesterday to fix or reduce the prices of hundreds of basic groceries.
In a bid to contain rising inflation, major retailers have agreed to maintain the price of 400 basic foods and household goods across 70 stores.
Lulu Hypermarket, Spinneys, Carrefour and the country's co-operative societies have all signed up to the Ministry of Economy price fixing plan, which will run until the end of the year. Some of the retailers have agreed to lower prices to the same level as the wholesale cost, while others will cut prices by up to 50 per cent, the ministry said.
All the retailers have agreed to keep the prices at the same level, even if there are vast fluctuations in the cost of raw materials locally and globally. Prices of food staples such as rice, dried pasta, bottled water, flour, meats and tea will all be fixed, as well as household goods such as washing-up liquid. Popular consumer brands like Coca-Cola and Pepsi will also see prices maintained at current levels.
Consumers welcomed the news, conceding that the average price of a weekly shop has risen sharply in the past year.
"I shop once a week, and I have seen my grocery bill reach Dh2,000 a month, from Dh1,500 a year ago," said Eric Tolibas, as he was walking out of Carrefour in Abu Dhabi yesterday. "I think it's a great initiative if it is successful."
It is not the first time the ministry has taken action to control prices. Prices were cut by up to 40 per cent for one month in March and the ministry often agrees with retailers to regulate prices during Ramadan. But this is the first time measures have been put in place on this scale and for such a long period of time.
Expectations of rising food prices prompted the price cuts. "We have received indications from different organisations that there will be price increases in most commodities in 2011 to 2015, therefore the minister is keen that they have stability in prices," said Mohammed al Shehhi, undersecretary of the Ministry of Economy.
About 75 per cent of the market share of retail outlets are participating, the ministry said.