UAE residents find bigger malls more convenient than grocery stores

Small and medium-sized groceries and supermarkets are facing a serious threat to their survival from big supermarket chains.

Speaking to ‘Emirates24|7’, several small grocery owners and their suppliers said a major chunk of their business has already gone to big malls. The opening of small branded outlets in major residential areas is another threat to small and medium-sized groceries.

The introduction of new rules to modernise the groceries have added to their problems. The Abu Dhabi Food Control Authority (ADFCA) has introduced new standards to modernise groceries in the capital. Even though the objective is to improve the appearance and hygiene standards of the nearly 1,300 grocery stores, the majority of them could not comply with the new requirements and the ADFCA deadline ends on December 31.

According to the authority, groceries should have wider aisles, more organised displays and should also house ATM machines and a small kitchen with snacks and coffee.

Some grocery owners who approached this website said they are on the verge of bankruptcy as they are forced to clear their stock before the deadline.

“With December 31 fast approaching, most of the groceries have two

options: to invest the huge amount of Dh200,000 to expand the small groceries into more spacious ones with improved hygiene or close down.

Hundreds of groceries are facing an uncertain future and a number of others who supply goods to these outlets are also facing an uncertain future,” said an Indian grocery owner who has been in the business for more than two decades.

He said business in groceries have been gradually coming down as customers leave the small groceries and shop from big malls. “This is happening in all the emirates,” he said.

“Already the big malls are present everywhere, leaving the small grocery shops with negligible business. With the opening of small neighbourhood shops, business is further down for us,” he added. “They are also offering home delivery for even small purchases,” he added.

Mohammed, a grocer in Ajman, said: “We have been doing reasonable business, but new rules regulating the sale of cigarettes by groceries and supermarkets have caused a sharp decline in our sales. Counter sales of cigarettes is banned in small groceries and it has affected the cash flow in our shops. However, the ban is not applicable to cigarette sales in big malls and the small grocer’s loss is a gain for big malls.”

“During the economic downturn, many labour camps closed in Ajman, affecting our captive business. There has been an increase in the cost of operation including a new charge for waste collection. Every month we have to dole out Dh200 or more just to clear the waste. Many groceries have been either closed or on the verge of closure.

“Some businessmen have absconded leaving behind huge amounts of unpaid credit to suppliers. This in turn has affected the availability of grocery supplies on credit. Now many suppliers insist on cash and not on 90-days credit which groceries used to get earlier,” another grocer said.

“We are surviving because some residents in the building want home delivery of water and other stuff. Our other regular customers are those who buy on credit, because the big malls or supermarket chains do not give credit or home delivery. Our business has come down substantially,” said Shahul, a grocery owner in Sharjah.

“While the big malls have huge retail space of 200,000 square feet or more, now the branded outlets of 4,000 sq ft are opening in major residential areas. Customers with cash are rushing to these outlets, leaving the small grocers on the verge of closure,” added Imran, another grocery owner in Sharjah.

“The big chains get their bulk supplies and can afford to sell cheaper than the small groceries or small supermarkets. We cannot match the special prices and offers in the big shops which have also started home delivery for as low an order as Dh50, a monopoly so far enjoyed by small neighbourhood grocers,” he added.

Small grocers are also facing acute shortage of employees. “Nowadays business is down and the cost of operation has gone up sharply. We are not getting Indian employees to work on salaries of Dh1,000 or less.

Bangladeshis who man Indian grocery shops these days face a communication gap with majority of the customers,” said Kabir, another Indian grocery shop owner in Sharjah.

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