Skip to content Skip to Search
Skip navigation

British firms tread fine line against rising inflation in the UAE

The ‘discount culture’ is making it harder for businesses to maintain quality in a crowded market

Creative Commons
British-owned, Dubai-based companies are absorbing rising costs for now

Through our close working relationship with the British Chambers of Commerce (BCC) we at the British Business Group Dubai know that the UAE is not the only country battling inflation.

Businesses in the UK have struggled with soaring prices too – even before the energy crisis began to bite. 

In a BCC survey of 1,000 businesses in the UK conducted in February this year, 73 percent of firms said they were raising prices in response to rising costs. 

In contrast, we are currently seeing British-owned, Dubai-based companies absorbing rising costs rather than passing them on to customers.

In some cases, they’re also increasing salaries to retain talent. But for how long can this be sustained?

Our members often speak of the “discount culture” in the UAE, with price outweighing quality in the decision-making process in negotiations.

Staying true to British standards and integrity in manufacturing quality, our members remain defiant in their business values. But in a crowded international market, this takes real grit.

For those who have the luxury of being able to select partners and clients, there is a growing trend among members to work only with reliable and like-minded partners.

A strength of the British Business Group is that it attracts and provides a platform for British companies, and brands recognised as supportive of British companies, to meet and connect with one another.

We see great collaborations within the ecosystem based on shared values and agreed and met expectations. 

British expats take a risk when moving outside the UK, and for a good 15 to 20 years the risk-reward ratio of doing business in the UAE has consistently tipped in our favour.

However, amid the pandemic, owner-managed businesses felt the isolation intensely, and the majority missed out on government support schemes for businesses – both in the UK and the UAE. 

We heard, through our members and through a UAE-wide survey, that business owners were going to great lengths to keep afloat, using credit cards to pay employees, forfeiting their own salaries, and reluctantly making redundancies as a last resort. 

The UAE government says it recognises the importance of the expat community and our role in the economy and supply chain.

With recent reforms and greater communication between government and the private sector, there are schemes in place and in the pipeline to ease the financial and operational challenges for SMEs, while also making the UAE an incredibly attractive place to live and work. 

Speaking to our members, many will not reach out to banks for financial support, as there is not currently the same support frameworks available as in the UK. Instead, business owners are seeking more creative solutions. 

Some members are exploring ways to better control their supply chain. Some are appealing to UK partners to set up in the UAE, and exploring the feasibility of manufacturing hubs based in Dubai.

This would greatly benefit the country, contributing to a more sustainable “made in the UAE” model, reducing shipping costs and impacts on the environment.

There is a concern, however, that with much smaller margins, coupled with a duty of care for staff, the pressure of absorbing rising costs will eventually weigh down on business owners’ ability to invest, recruit and grow. 

Katy Holmes is general manager of the British Business Group Dubai and Northern Emirates

Latest articles

The WakeCap system being used on a construction site

Aramco adopts heat-sensing construction helmets

Saudi Aramco is deploying advanced safety helmets equipped with heat stress sensors to protect workers on some of its construction sites, a critical concern in the Gulf region’s scorching climate. The helmets, developed by Dubai and Saudi Arabia-based construction tech startup WakeCap, utilise internet-of-things (IoT) technology that monitors worker attendance, location, and safety incidents in […]

Wind turbines above the village of Kotronas in the Peloponnese region. Greece's Terna Energy invests in wind, solar, hydroelectric and pumped storage projects

Masdar buys Greece’s biggest investor in renewables

The UAE’s state-owned clean energy company Masdar is to acquire a majority share in Terna Energy of Greece. The initial deal – one of the largest in the European renewables market and the biggest ever energy transaction on the Athens Stock Exchange – is for a 67 percent stake. The price of €20 ($21.45) per […]

KBR Iraq

US firm wins $46m contract to boost Iraq infrastructure 

US engineering giant KBR has won a five-year $46 million contract to support Iraq’s infrastructure development and future energy projects, including mega-projects. The company is expanding its presence in Iraq, establishing a new office in Baghdad and said it is also considering the creation of a design centre to enhance local engineering skills. Under the […]

People walk through the souk in Manama, Bahrain; FDI has been encouraged by the golden licence programme for investors

Bahrain attracts a record $6.8bn in foreign investment

Bahrain has set a new record by attracting $6.8 billion in foreign direct investment (FDI) in 2023. This is a 148 percent increase from the previous year’s $2.8 billion, according to the latest World Investment Report by the UN Conference on Trade and Development. Kuwait emerged as the top contributor, accounting for 36 percent of […]