The key facts
- The war with Iran (since February 28) and the effective closure of the Strait of Hormuz have disrupted supply chains and pushed up global prices for food, transport, insurance and energy.
- Lulu Group and Al Ain Farms say they are holding prices on essential goods, partially absorbing costs; food inflation in the UAE was 8.05% in September (up from 7.39% in August).
- The UAE Ministry of Economy monitors prices on 8,343 items through the Essential Goods Prices Platform and has conducted more than 7,000 inspections since the conflict began.
Retailers Promise Stable Prices
Leaders of the UAE grocery industry have pledged to keep prices in check and maintain shelf availability, seeking to soften the impact of the war with Iran. The conflict, which began on February 28, caused widespread disruption in the region: Iran's attacks on commercial vessels effectively closed the Strait of Hormuz, hitting supply chains and raising global prices for food, transport, insurance and energy. Shamim Sainulabdeen, head of private labels at Lulu Group International (more than 100 stores in the UAE), said the chain would follow government guidance and would not raise prices on essential goods. 'We are a responsible retailer, so we are absorbing part of the costs. The government insists on price stability for fast-moving essential goods,' he said. Lulu has chartered vessels to speed up deliveries instead of shipping orders jointly with other companies.
Inflation and Consumer Behavior
According to the Dubai Statistics Center, food inflation rose to 8.05% in September from 7.39% a month earlier. A study by consulting firm Redseer found that 78% of respondents in the UAE noted rising grocery prices, while 51% named food inflation as their main concern. Nagham Hassan, Middle East market analyst at the eToro platform, noted that the conflict has accelerated global inflation: consumers are choosing cheaper options and cutting discretionary spending. According to her, Lulu and Spinney's reported growth in private-label sales, which are usually cheaper than branded products; people are visiting supermarkets more often but spending less per trip. The UN trade and development body previously warned that rising energy, freight and insurance costs due to disruptions in the strait could increase food prices and put more strain on household budgets.
Producers Prepared in Advance
Tareq Al Hosani, chairman of Al Ain Farms Group, said the company had contingency plans in place even before the war began. These included using the port of Fujairah, working with suppliers and contacts in Saudi Arabia and other neighboring countries, as well as air freight. Strategic reserves of feed and other materials provided an additional buffer for production. 'We have always had plan B, plan C and plan D to keep serving our market,' he said. According to him, the company absorbed additional costs to minimize the impact on the population, while customer loyalty and sales growth helped maintain profitability with limited price changes. 'We try to absorb as much of the cost fluctuations as possible and pass on the minimum to customers, because this is only a transitional period,' he added.
Government Price Controls
In April, the UAE government launched the Essential Goods Prices Platform, overseen by the Ministry of Economy and Tourism, to track prices on 8,343 items in 525 stores of 13 major retailers. In August, the tool was expanded after 143,000 visits in its first four months. The government took measures against unjustified price increases following a surge in demand for essential goods in the first weeks of the war: in the two weeks after the conflict began, the ministry conducted more than 7,000 inspections of retailers. At the time, it announced 'enhanced monitoring' to ensure price stability, especially on nine key items — vegetable oil, eggs, dairy products, rice, sugar, poultry, legumes, bread and wheat. Prices on these items cannot be raised without approval from the ministry and the national committee for assessing food costs.
