x Abu Dhabi, UAEFriday 19 January 2018

Fight food price hikes with better habits

Jane Williams looks at how to beat the effects of rising food prices in the Emirates.

A poll of 160 women in the Emirates, conducted by Visa over the summer, found that almost all noticed big increases in the cost of groceries. Pawan Singh / The National
A poll of 160 women in the Emirates, conducted by Visa over the summer, found that almost all noticed big increases in the cost of groceries. Pawan Singh / The National

Volatile commodity prices, high commercial rents and a weakening US dollar continue to pressure UAE food prices, with little relief in sight. But a change in lifestyle and smarter shopping habits could ease the pinch.

World Food Day, which is celebrated tomorrow, is a reminder that however much consumers in the Emirates may grumble about rising grocery bills, in some parts of the world higher food costs have created a real crisis.

The UN's Food and Agriculture Organisation, the organiser of World Food Day, says that since June last year, an additional 44 million people worldwide have fallen below the US$1.25-a-day (Dh4.59) poverty line as a result of higher food prices.

Although higher salaries in the UAE have kept residents from this dire condition, the effect is still being felt.

A poll of 160 women in the Emirates, conducted by Visa over the summer, found that 94 per cent had noticed a significant increase in the overall cost of groceries, with many saying that they have taken measures to reduce their grocery spending as a direct result.

Whether it's having to find cheaper recipes, taking more interest in where you shop and what you buy or foregoing luxury items and dinners out, it seems most consumers are having to tighten their belts.

Retailers insist prices have remained steady since the sharp leaps of 2009, but Juma Bilal Fairouz, the president of the Emirates Consumer Protection Society (ECPS), says reports to the Ministry of Economy in March and September, and anecdotal evidence from his wife and mother, show prices are still on the up.

"The reports [to the ministry] found the price of all foods went up in 2011, with the exception of fish and tea," Mr Fairouz says. "But speaking daily with the women in my family - who keep me updated on these things - I'm led to believe that the price of fish and tea has risen, too.

"And prices are going to increase further; some items could double in the next two or three years."

Higher commodity prices, greater demand and soaring commercial rents continue to punish prices, Mr Fairouz says.

The ECPS, based in Sharjah, is diligent in following up complaints by customers and has found cases where extreme price increases have been exacerbated by greedy middlemen taking an extra cut for themselves when passing the rise on to their customers.

"A woman called me recently to complain that a bag of sugar she bought for Dh85 one week cost Dh125 a week later," Mr Fairouz notes.

"I spoke to the co-op involved and they blamed the importer for the price rise. The importer blamed the price in India. When I went back further and checked the price in India, I found it had gone up, but by maybe just 20 per cent of the final price increase.

"While I see there is need to maintain a free economy, there should be a regulatory system in place to stop this happening."

He says agreements between the UAE Government and food retailers, such as those introduced earlier this year, which resulted in a temporary lowering of prices of staple products by up to 40 per cent, help calm consumer fears and stabilise the cost of living. However, he says it doesn't provide a long-term solution.

"The government is doing what it can, but we can't put a socialist system in the UAE," Mr Fairouz says.

"It's up to consumers to take responsibility, to change their lifestyle and shopping habits.

"We, as consumers, should try not to buy too much.

"We should consider the price of the food we are buying and look for alternatives - alternative products and alternative sources."

Selecting retailers' private labels and local products instead of international brands is one way to save money at the supermarket, while scanning newspaper advertisements and brochures for special deals is another.

Buying just what you need and eating leftovers instead of throwing food away will also go a long way to cutting costs. And eliminating junk food from your diet makes for a healthier waistline and wallet.

Belinda Rennie, a dietician at the Cooper Health Clinic in Dubai, says buying organic is a long-term way of cutting costs and maintaining good health.

"Organic fruit and vegetables may seem more expensive, but weight for weight, it's actually a more cost-effective way to feed your family," Ms Rennie says.

"When you have good-quality organic produce, you're less likely to throw it away. And cutting out junk food and eating at home more than covers the extra initial cost of organic products."

Cutting back on red meat, replacing it with lentils and eating smaller meals more often also helps to reduce food bills and waste.

Planning meals a week ahead, cutting down shopping trips to once or twice a week, which will limit your exposure to spontaneous purchases, buying seasonal fruit and vegetables and choosing cheap fish or meat cuts can all make a difference.

In their defence, retailers say they are under pressure from high rents, rising costs and wary customers spooked by rumours about soaring food prices. Customers, they say, are already "sale savvy" and will take advantage of two-for-one type offers.

However, they maintain prices have stabilised and consumers have done little over the past 12 months to change their shopping habits.

"I haven't seen any unreasonable price increases this year," says Georges Mojia, the general manager of Abu Dhabi Co-operative Society, which operates 12 businesses across the capital.

"Food is a commodity," he says. "If the price of something like wheat goes up, we can't control that. But any price rise we have passed on has been very minimal.

"There is a lot of competition out there and consumers are not idiots; they will shop around and change their shopping habits if they notice one retailer is selling at a slightly higher price."

Mr Mojita says UAE shoppers have many ways of lowering their food bills, including buying retailers' private brands, which could save them between 20 per cent and 30 per cent on the price of an international product. This is a habit few have adopted, he says.

Compared with the UK, where the private brands of supermarkets such as Tesco and Waitrose make up to 80 per cent of total sales, the sale of Abu Dhabi Co-operative Society's home brand is very low.

Jannie Holtzhausen, the chief executive of Spinneys Dubai, says the weakening US dollar has affected the price of food imported from Europe and Australia and soaring rents in popular shopping malls have added to retailers' costs.

"If we allow landlords to increase retail rents by double or even treble at the end of a contract, is it fair to expect retail shareholders to reduce profits?" Mr Holtzhausen says.

"Housing rents may have come down, but I have definite experience where commercial rent at some of my retailers has more than doubled in the last 12 months.

"There's no doubt about it, high rents will have an affect on the price of tomatoes."

Lulu Hypermarket also offers its own branded products and has established direct sourcing offices in different parts of the world to avoid middlemen as one way to cut costs.

"We have always been focusing on sourcing large quantities so that we can pass the benefits to the end consumer," says V Nandakumar, the manager of corporate communications at the EMKE Group, which owns Lulu Hypermarket.

"The Gulf region depends largely on imports for the majority of their consumables and any price upheaval in any part of the world will have immediate impact on prices here.

"One good idea is to start promoting aggressively local farming. At Lulu's, we are ardent supporters of local agriculture and have dedicated areas promoting locally grown vegetables and fruits in our stores."

The UAE Government has raised the country's self-sufficiency levels considerably. The Emirates now grows 95 per cent of all dates consumed here, produces 79 per cent of its fish for sale, 25 per cent of vegetables, 18 per cent of red meat and poultry products and 95 per cent of fresh milk.

But 80 per cent of food bought in the Emirates still comes from abroad.

Because so much of the food we eat is imported, Mr Fairouz says prices will always be volatile and vulnerable to extra costs.