Consumers are now holding onto their cash and buying less, prompting wholesale outlets to reduce their orders from local producers and importers, managers of supermarkets and big department stores said. “Most supermarkets used to order 100 cartons of a specific product, now those orders have been scaled down to just 20 cartons because people are no longer buying, particularly expensive fruits and vegetables,” said Sayed Salem, general manager of Farm 9 Supermarket in Al-Khobar. He said many perishable products, like expensive fruits and vegetables, are rotting because people are not buying them. “Tomatoes, one of the most expensive vegetable products, are rotting. We have to sell them at 50 percent reduced price and yet nobody is buying,” Salem said. “Imported mangoes, which sell for SR17 per kg, are also getting spoiled. After three days we have to dispose of them at 50 percent of the tag price. This is the same story with other perishable products; it is a market dislocation,” Salem said. Supermarket managers and operators forecast difficult times for both local products and importers. “Local producers of fruits and vegetables will have to sacrifice their profits in order to attract local cash-strapped buyers who have to buy less and depend on less expensive items,” a wholesale supervisor of a high-end supermarket in Dhahran said. “Importers are adversely affected as well because it is very difficult for them to reduce their prices due to the high cost in their production and the tariffs on shipping, transportation and insurance. It is simply a chain reaction which local consumers no longer want to be caught in,” he said. “Normally after Ramadan, the Eid holidays, and the opening of school, consumers' confidence returns. However, that is not the case this year; people are saving their money and not buying,” Salem said. Supermarkets and high-end stores all over the Kingdom are now introducing promotional gimmicks to attract hesitant customers. Some of the promotions provide discount cards to buyers who can show at least SR500 worth of receipts. To qualify for a 10 percent discount on any day of purchase, the shopper must purchase at least SR25 worth of goods. “The financial earthquake that started in America and rocked many financial institutions in that country is yet to come in the Middle East and Asia, and people are really worried and wary, which is why they are keeping their money.” Salem said that whoever is elected the next president of the United States, would not have a magic wand to solve the global financial crisis. – SG __
