Inflation rather than enthusiasm to drive added Ramadan sales

24 March 2023 2 min. read

The holy period of Ramadan is again set to break sales records this year, but the feast thanks its 2023 growth for a large part on the dynamics of inflation – rather than consumer enthusiasm.

Now in its fifth edition, Redseer Strategy Consultants every year on the eve of Ramadan releases its prediction for Middle East and North Africa (MENA) retail sales during the holy period. The firm’s latest estimate forecasts growth from last year’s $61 billion to $66 billion this year.

The 2023 Ramadan feast kicked off yesterday, and is set to end on Friday the 21st of April. More than 1.9 billion Muslims worldwide are touted to participate in the holy month, which includes refraining from food and drink during the fasting period, and engaging in practices that improve one’s faith, patience, and sense of community.

Rising inflation and unchanging demand will contribute additional 5bn compared to last year

For retailers, Ramadan is a bumper month, comparable to the joys of Black Friday. According to the study by Redseer Strategy Consultants, the levels of enthusiasm about Ramadan shopping are roughly on par with last year, meaning that total sales is on track to emulate 2022’s $61 billion. Higher average prices will however drive the added $5 billion in turnover.

Notably, planned purchases are expected to rise by 14% during Ramadan this year, while unplanned purchases down on the year previous. Respondents are more enthusiastic about spending on fashion, dining out and domestic travel, but they are less likely to spend on consumer-packaged goods and furniture than, the researchers found.  

The likelihood of spending on real estate and cars is at the same level as 2022, the research further found.

The online channel will continue to eat market share from the brick-and-mortar channel. “A strong digital enabler ecosystem, a digital-ready population, a mobile-first e-commerce approach, and proactive policymaking has created a boom in the ecommerce segment,” said Sandeep Ganediwala, a partner at Redseer Strategy Consultants.

In their online exploration process, Ganediwala said that consumers are increasingly likely to by-pass traditional search methods for community channels. Ganediwala: “These channels assist consumers in making informed decisions through peer reviews.” For businesses competing in the online landscape, it therefore becomes “important to adapt and revamp their strategies to cater to the evolving needs of consumer expectations.”