Skip to content Skip to Search
Skip navigation

Dubai businesses ease up on discounting as costs climb

Families at Dubai Mall. The PMI figures on discounts come despite the Summer Surprises shopping festival held in August Katarina Premfors/Dubai Tourism
Families at Dubai Mall. The PMI figures on discounts come despite the Summer Surprises shopping festival held in August
  • Drop in selling prices weakest for 9 months
  • Headline PMI 55.0, down from 55.7
  • Companies go on hiring spree

Dubai’s appetite for discounting waned in August as more companies opted to pass on increased costs to customers, a survey of non-oil businesses has found.

The S&P Global Purchasing Managers’ Index (PMI) for August found that the impact of rising input costs on margins made companies “less inclined to offer discounts on their products and services”.

The report revealed only a slight drop in average selling prices in the emirate last month – the weakest since November 2022.

Dubai has a long-established discounting culture, but business leaders such as Jen Blandos, founder of Female Fusion, a UAE-based community of female entrepreneurs, have warned against the practice when costs are climbing.

“In a world where costs are rising, providing discounts can be a challenge for many small businesses,” Blandos told AGBI.

“It’s time to leave the ‘race to the bottom’ in the past because, in fair pricing, quality thrives and that’s where everyone emerges a winner.”

The changing mood on discounting emerged despite the Dubai Summer Surprises shopping festival, which ran throughout August and offered consumers spend-and-win promotions and daily deals.

Dubai’s headline PMI figure stood at 55.0 in August, down from 55.7 in July.

It was the second monthly drop in a row and the lowest recorded figure since February. However, the index remains above the 50.0 mark that separates economic growth from contraction.

After accelerating to a 10-month high in June, the rate of improvement in business conditions softened further in August.

As a result, the increase in business activity was the least marked since January, exacerbated by a slowdown at wholesale and retail companies. 

Although construction activity continued to rise sharply, a drop-off in new work growth painted a weaker picture for the sector’s outlook.

David Owen, senior economist at S&P Global Market Intelligence, said: “While the expansion in business activity appears to have reached its peak, it is still running well above trend, boosted by strong new order inflows and robust economic conditions.”

Those new orders prompted businesses in Dubai to embark on a hiring spree: August had the joint-fastest rise in employment since November 2015.

Owen added: “The latest data on business sentiment and hiring adds to these positive findings, suggesting that companies feel there is still considerable scope for expansion in a growing market.”

Latest articles

A solar plant in Uyayna, north of Riyadh. Solar power will contribute to Saudi Arabia's 2030 renewable goal

Renewables target for 2030 in sight for Saudi Arabia

Saudi Arabia will expand its renewable energy output sixfold by 2030 if it continues at its current pace, a survey found this week. But it will need to add 20GW of capacity annually if it is to reach an ambitious government target laid out last year. In December the government set a new target of […]

The Khazna facility will raise utility Ewec’s total installed solar PV capacity to 5.5 gigawatts

Developers sought for Abu Dhabi’s Khazna solar plant

Emirates Water and Electricity Company (Ewec) is seeking developers to build a 1,500 megawatt solar power facility in Abu Dhabi as the emirate ramps up its green energy drive. The utility has issued a request for proposals to qualified companies that have expressed interest in developing the Khazna Solar Photovoltaic project. A total of 27 […]

Turkey textiles

Hit by rising costs, Turkey’s textile producers move overseas

Textile manufacturers in Turkey, struggling with pricing pressures and labour costs, are moving their operations overseas, although at least some in the sector see a turnaround by the year’s end. The Istanbul Chamber of Industry sectoral purchasing managers’ index for March showed sentiment among textile manufacturers was the lowest among the 10 sectors covered by […]

Mubadala-backed Getir weighs asset sales

Turkey’s grocery delivery startup Getir is considering asset sales as part of its ongoing restructuring talks, according to a media report. The company, operating in five markets, including the UK, aims to sell off assets such as US online grocer FreshDirect, acquired last year, and BiTaksi, a ride-hailing app in Turkey, Sky News reported, citing unnamed […]