Retail sales spike before new year
influenced by the Dubai Shopping Festival (DSF), which will run until January 28, 2018. With retailers promising discounts ranging from 50 per cent to 90 per cent, even the most reluctant shoppers were tempted into visiting different shopping destinations.
Naveen Sharma, chairman of the Institute of Chartered Accountants of India — UAE (Dubai) chapter, said many residents, especially those that are new to the tax, took the last few days before the new year to stock up on items that would have cost them more after January 1, 2018.
“VAT is a consumption tax, so anything that you consume will be taxed. Many shoppers went to malls to buy items that they know will be taxed in the future, such as electronics. This is a case of them making decisions right now, rather than postponing them for the future, in order to avoid paying extra as tax.”
Sharma explained that many residents opted to think further ahead and even buy items for special occasions such as jewellery and watches for wedding anniversaries. “We have also had cases of people making large electronic purchases such as smart TVs and smart phones. In addition, we even witnessed cases of people opting to buy cars before the new year’s deadline so that they remain in their budgets.”
Anurag Chaturvedi, senior director at Crowe Horwath, said: “One shopper bought over 5kg of gold due to the VAT, and many electronics and grocery shoppers bought double their usual stock for consumption.”
“We witnessed an exponential surge in sales across all segments in the last few days ahead of the VAT implementation. Electronic gadgets in particular were in high demand, and we saw an increase of over 40 per cent in the last week of December, with sell-outs across all categories, particularly in smartphones, laptops, TVs and new gadgets,” said Nadeem Khanzadah, head of omni-channel retail at Jumbo.
“We have had a hugely successful December at Dubai Festival City Mall, where we experienced year-on-year growth,” said Steven Cleaver, director of shopping malls at Al-Futtaim Group Real Estate. “We can attribute this to a number of activities and promotions that we have hosted,” he said.
Adrian Lee, head of leasing at Wafi, said Wafi has enjoyed an increase in footfall through December, following on from progressive growth through September. “This is attributed to the annual Christmas activity... there was no spike in footfall, attributable to the introduction of VAT.”