Sugar offer is a mix of sweetness and profit

It may be a sign of the times, but when sugar is offered as a free gift along with Dubai Shopping Festival (DSF) purchases, it can only serve to sweeten the bitter pill of price rise.

This DSF, Dubai retailers are looking beyond the mundane gold coins, diamond rings and premium luxury vehicles as prizes to attract customers.

One promotion that is attracting many ordinary customers in various outlets is a 2kg free sugar bundle offer with 5kg of rice. With sugar prices reaching record levels – 29-year highs – ordinary consumers, cafeteria owners and traders are all making a beeline for the offer.

"There are many offers in the market, but one of the fastest moving items in our outlets is the 5kg-rice-plus-2kg-free-sugar offer from a leading rice trading house. Due to the high price of sugar in the open market, many customers are utilising this offer," said a sales supervisor of an Enoc Petrol Station convenience store in Al Qusais, which runs DSF offers.

"If we stock a big pile of the rice and sugar bundles in the morning, by afternoon they are almost finished. Many people are buying this bundle offer," he said, requesting anonymity.

Walid Al Shami, Regional Sales Manager, Al Shami Sugars, said: "I am not surprised by this free sugar offer by some traders during the DSF. Sugar has now entered the circle of gold coins or diamonds for such offers because the sugar price is at a record high. I am sure many people will take up the offer.

"People may not use gold coins but keep them as a treasure. Now sugar is also treated as a precious item, though a precious item for daily use."

Such free offers, however, have also spawned an illegal market. A grocery owner in Sharjah, also speaking on condition of anonymity, said small grocers and cafeterias are scanning the market for such discount offers, which they use to accumulate the commodity and then re-sell to other customers.

"We buy the bundle offer of rice and sugar, separate both the products and sell them as two products to our customers. The sugar price being very high, we take such bundle offers from leading supermarkets," he said.

"However, we cannot do it where the rice is a branded product, because the supermarket chains can sue us for illegally selling their brands. We don't sell the branded products bearing the supermarkets' names."

For small shops, the sharp increase in the sugar price has also caused shrinkage of business because customers are buying only limited quantities.

"For big supermarket chains that buy sugar in bulk, the profit margins are high. In the case of small groceries, the low profit margins are under pressure now," said another grocery owner.

The supermarket chains have also put a ceiling on the maximum number of packets of the bundled offer that a customer can buy. However, there is away around that, too: Some grocery owners enlist the help of friends and friends of friends to buy as many of the bundled offer packets as an individual can and then hand them all over for a small benefit.

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