OnIslam.net

CAIRO – Despite the ongoing political turmoil across the Middle East, the holy fasting month of Ramadan remains a golden chance for businesses to make big profits.

"We have seen a sales growth, about 20 percent higher than normal sales," Shaji Philip, grocery manager at local grocery chain Spinneys in the United Arab Emirates, told Reuters.

"From 2 o'clock to 6 o'clock we are busy, after that people are at home to break the fast. Then we are busy again after 9 o'clock."

On the eve of this year's Ramadan, consumption shot up by 30 percent in the United Arab Emirates, retailers said.

That's similar to the boost seen elsewhere as people stocked up on groceries needed for putting together iftar meals.

Ramadan is the holiest month in the Islamic calendar.

Muslims in Ramadan, except for the sick and those traveling, refrain from eating, drinking, smoking and sexual intercourse from dawn to dusk.

The holy fasting month is marked with large family gatherings to break the daily fast.

Spending on food during Ramadan often increases massively because of the lavish meals set out after the fast ends at sunset.

The rising food demand during Ramadan prompts some retailers hike up prices to get more out of consumers - a trend the UAE government acted against by imposing a price freeze on food items throughout the month.

`Eid Al-Fitr, which marks the end of Ramadan, is also big business, with auto sellers offering discounts and shopping malls launching sales.

Private consumption is a significant driver of economic activity in the Arab world.

In Saudi Arabia, consumer spending accounts for around 35 percent of the economy.

It is around 73 percent in Egypt, whose unrest-hit economy is expected to see growth of 1 percent in 2011 according to the IMF, its slowest since 1992.

Ramadan Boom

The Ramadan business boom is not expected to be affected by the current political unrest in the Middle East.

"Post-Ramadan there is more economic activity," Shaharayar Umar, marketing director at Dubai-based Pan Arab Research Center, told Reuters.

"The month instills fresh energy into the system."

According to PARC, across the Arab World advertising spending generally doubles in Ramadan, with some companies spending up to 78 percent of their annual advertising budget during these 30 days.

In 2010, the Middle East's top five spenders on advertising put down an average of 25 percent of their annual advertising budget in just Ramadan of that year.

Television is one of the main drivers for increased spending as the lifestyle shift translates into more time spent in front of the television during the day.

According to Mazen Hayek, official spokesperson for regional television giant MBC Group, the average time spent watching TV doubles to seven hours per day during Ramadan.

Of the total $2.2 billion spent on advertising in Ramadan in 2010, $1.7 billion was allocated to television alone.

Advertisers are betting the same will happen this year, to help make up for a drop in overall advertising due to the region's political and economic turmoil.

This year, because of the lunar rhythm of the Islamic calendar, Ramadan falls right in the middle of August, usually a slow time across the region, with searing temperatures and holidays.

But Ramadan usually encourages people to stay at home, and has been immune to political and commercial cycles.

"Our experience says that no matter where and in which calendar month Ramadan falls, it's a seasonality by itself," Hayek said.