Ramadan Economics — How Businesses Adapt to the holy month | Push Digits Chartered Accountants

Ramadan Economics — How Businesses Adapt to the holy month

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The holy month of Ramadan brings prominent changes in the nature of the economy of a country, affecting the various sectors in various ways. While several businesses go through a sizeable lull, many others witness a great boost in activity. This is most evident in the Muslim countries across the Gulf region. The month of Ramadan is fundamentally a time when people ponder about their lifestyle choices and keep away from materialistic luxuries. It is a time for modesty. Yet, there is a certain rise in consumer spending during Ramadan that compensates for the fall in other businesses. The holy month has a pervasive effect on the spending habits of Muslims. Ramadan is the month of goodwill and optimistic beliefs. So, the sellers strategically use these buoyant circumstances to effectively endorse their products, as optimism plays a large role in consumer attitudes, leading to greater sales for certain businesses.

One of the areas that benefit hugely during Ramadan is the food sector. However, many of the businesses in the country go into an idle state, as office timings are shortened, there’s a lack of tourists, phone calls go unanswered, and big business deals are halted. The fact that Ramadan occurs during the hottest month of the year does not help businesses either. Cleanco, the leading cleaning Service Company in the region, plans their annual budget and business strategy keeping Ramadan in mind, so as to keep their usual business. The downside to this, however, is that there is a pressure for them to finish their tasks really quickly, as working hours are reduced to 6 and their overall business decreases by 20-30%, according to General Manager of Business Development & Operations, Samer Hani. Nonetheless, Ramadan brings some positive effects as well. The upbeat side of shortened working hours is that employees get to spend more time with their family and they are satisfied, so once they return to work, they bring in a re-energized attitude.


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