Retailers have faced mounting challenges in their preparation for Ramadan this year, as ongoing geopolitical tensions and persistent supply chain disruptions continue to complicate operations.
As disruptions to trade routes, increased shipping costs, and delivery delays become an everyday challenge for exporters into the region, multinational logistics specialist Aramex UK has highlighted how retailers have been forced to rethink and adapt their logistics strategies in response to ongoing instability, juggling fluctuating transit times and rising costs with the promise of meeting consumer demand.
Having commenced on 28th February and continuing through to March 30, Ramadan will conclude with Eid al-Fitr, a celebration marking the end of fasting.
During the holy month, consumers adjust their shopping habits, prioritising essentials for suhoor (pre-dawn meal) and iftar (meal to break the fast), as well as gifts and festive preparations for Eid al-Fitr.
Beyond food, modest fashion garments, including abayas, kaftans, and embroidered outfits, often see a surge in demand over Ramadan, along with accessories such as scarves, handbags, and footwear. Perfumes, skincare, and cosmetic products also prove popular – making Ramadan a highly lucrative period for retailers, with many running exclusive promotions and tailored marketing campaigns to appeal to shoppers preparing for their Eid celebrations.
For the broader Middle East and North Africa (MENA) region, previous data indicates that retail spending during Ramadan reached $66billion in 2023.
While tipped to be another lucrative period for retailers, escalating instability and ongoing tensions across the Middle East still present a significant risk to supply chains, potentially disrupting shipping routes and causing delays in the delivery of goods, making it more challenging than ever to meet consumer demand.
Aramex UK, which has extensive experience in working with fashion and retail brands over its 40-year history, has affirmed that the past 12 months have been like no other, with the aftershocks from persistent tensions such as the Isreal-Gaza conflict and the Red Sea crisis still being felt.
During this time, retailers have been hit hard, with many experiencing delays in the arrival of critical inventory, threatening to undermine their ability to maximise sales opportunities, particularly during the Holy Month.
Major brands such as Next, Matalan, and Asos have all reported supply issues due to the Red Sea attacks over the past 12 months.
Part of the Aramex Group, which is headquartered in the UAE, Aramex UK has a strong presence across the GCC and Menat markets.
Umar Butt, chief executive officer of the UK and Europe at Aramex commented: “It’s certainly been a challenging time for retailers exporting into the MENA region. The Suez Canal acts as the primary trade route between the UK and Middle East, allowing vessels to travel through the waterway and reach major ports across the region. With attacks on cargo ships in the Red Sea continuing to remain a real threat, many ships are diverting their routes around the Cape of Good Hope to avoid the area, resulting in increased transit times and higher shipping costs.
“As a direct consequence of vessels taking longer to reach their destinations, ports have also been affected due to backlogs. This has had a knock-on effect with air freight, with airports facing delays in processing cargo due to a surge in demand for such services.
“Although some of these issues have eased slightly, operating within Ramadan has compounded those issues further for retailers, with reduced working hours, the introduction of no-fly zones, hiked freight pricing, and compliance challenges all putting an additional strain on their ability to ensure their goods arrive into the region on time.”
Late last year the British Chamber of Commerce’s Insights Unit found that half of UK businesses had been impacted by the conflict in the Middle East, almost double the proportion which had claimed to be affected in late October 2023.
Within the report, the majority cited increased costs as well as shipping disruptions and delays as main impacts.
The UK has become one of the leading countries which MENA consumers purchase from, with apparel, footwear, beauty and personal care products leading the charge.
Such is the appetite for UK brands, that in the past 20 years UK exports to the United Arab Emirates alone have jumped a staggering 171% according to ONS data.
Umar continued: “UK retailers are expanding into the Middle East due to a growing demand for British brands among MENA consumers, a demand that is driven by the reputation for high quality, luxury, and the prestige associated with UK products.
“With many Middle Eastern consumers frequently traveling to London for shopping, their strong familiarity with British brands continues to drive demand across the region’s expanding consumer base. Additionally, the rise in digital adoption among a tech-savvy and trend-conscious demographic presents a significant opportunity for exporters to tap into. Without an understanding of the region, how it operates and the logistical challenges that come with it, retailers do however run the risk of falling at the first hurdle.
“We remain hopeful that tensions in the Middle East will ease as the year unfolds, but in the interim, working smarter is essential. To ensure a successful Ramadan, retailers would have needed to plan ahead and embrace a more agile logistics strategy, one that allows them to adapt quickly and explore alternative solutions, whether that be by adjusting transport routes or switching modes of shipment.”