Inelastic goods are purchased at about the same amount whether the price drops or rises. For certain types of goods, especially staples, consumers demand will not decline even if an increase in price was observed.
A research by the Cairo Chamber of Commerce revealed that Ramadan is a period when consumer spending and economic indicators double-clutch despite financial determinants. In Ramadan, Egyptian households' spending on food reach approximately EGP 1.5 billion daily.
Consequently, it is quite common to observe special offers on a variety of commodities, to attract more consumers and expand market shares during the holy month.
Hypermarkets usually offer Ramadan bags, in an attempt to attract the largest number of consumers during the month, with the opportunity of choosing the items included. Generally, Hypermarkets offer competitive prices all year, especially in Ramadan, since their marketing strategy is based upon mass marketing and high sales.
According to Hany Kamal, assistant branch manager of hypermarket Carrefour, the sales of staples, including rice, pasta, oil, and margarine significantly increase during the holy month of Ramadan, which is a big opportunity for retail chains to make considerable earnings.
Kamal said that sales have dropped by about 30% since the devaluation of the Egyptian currency, yet, purchasing power still witnesses an upward trend throughout the holy month.
“Our nut sales have declined, however, they spring during the holy month,” he said, adding that pricing is the primary stimulator of sales.
[caption id="attachment_49189" align="aligncenter" width="607"]
Ahlan Ramadan Fair[/caption]
Ramadan Preparations
Marketing campaigns usually begin a month ahead of Ramadan. Since the Egyptian government has reduced imported goods, through raising tariffs and providing local alternatives, more than 85 percent of retail products are manufactured in Egypt. Decorations, Ramadan bags, special offers, as well as a balance between high quality and prices are the biggest generator of increasing sales during Ramadan despite high inflation.
However, smaller supermarkets take around two weeks to prepare for Ramadan. Their earnings do not observe a big boost as larger markets do.
Consumer Behavior
The holy month is associated with family gatherings. Plenty of traditional dishes are served to satisfy all tastes. watching TV series and dining, after a long day of fasting, is very common behavior during the holy month.
According to the Cairo Chamber of Commerce, the year 2017 observed an inflation hike in commodities, especially in vegetables, driving retail sales down by 45 percent compared to both the averages of the years 2015-2016.
This year in the holy month, a complete shift in consumer behavior was observed, yet, 2018 showed a better performance in purchasing power. Consumers were purchasing value packs and less expensive items. However, the drop in demand reduced the imports bill and constrained the inflation trend.
As for Ramadan 2018, sales remained below the average of preceding years, especially when it came to nuts, which was 25% higher than 2017 prices.
However, the Ministry of Supply has launched an initiative "Ahlan Ramadan" to counter the inflation of basic commodities. The program offers basic commodities at monitored and affordable prices.
[caption id="attachment_49192" align="aligncenter" width="616"]
Iftar in Ramadan[/caption]
Media & Shopping
The overall Consumption increases in Ramadan, mainly due to the tendency of spending more time at home.
In the holy month, radio listeners, who follow religious content, increase by 11%. In addition, TV audiences and viewing duration reach about 5 hours 19 minutes during Ramadan.
The biggest increase in internet use comes after breaking fast time. people spend around 3 hours 20 minutes on the internet, with an increase of 12%.
Concerning e-commerce, Consumers buy more food and beverages, furniture, clothes, and travel items during the month of Ramadan. Consumers' behavior to prepare for the feast "Eid al-Fitr" during Ramadan, encourages them to purchase new smartphones. The sales of smartphones increase by 7% during that month. At the same time, vehicle sales increase by 21% during the same month.
Advertisements
Commercial breaks and advertisements increase rapidly during Ramadan. The increase slips to 76 percent compared to pre-Ramadan period.
The number of ad responses from Coffee or Tea increases by 29%, while Communication ads increase by 77% and Textiles by 294%. The total advertising spending on certain products such as milk, dates fruit, mouth fresheners, tea, coffee, desserts, soup products, noodles, Juice and Syrup increase significantly to over 447%.
Also, advertising expenditure of ready-to-drink beverages also expands by 110%.
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