Al-Ahram Weekly | Economy | Fretting at the festival

		1 - 7 August 2002 Issue No. 597 Economy	Current issue Previous issue Site map
Published in Cairo by AL-AHRAM established in 1875		Recommend this page

Fretting at the festival
Still far from being a tourist magnet, the month-long Tourism and Shopping Festival has attracted more participants this year. Sherine Nasr sounds out the views

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Big discounts yet hardly satisfactory sales
Two weeks of discounts offered by the fifth annual Tourism and Shopping festival have till now failed to bring about the anticipated improvement in local market sales. When the event was first launched in 1998, there were big hopes it would become an international event that would attract tourists to Egypt. Five years later, the festival has grown into nothing but a giant sale for basic products, such as ready-made garments, textiles and minor household appliances and accessories.
"During the past two weeks, sales have dropped sharply. There is hardly any profit to make," said Ahmed Moustafa, the executive director of a private shopping centre for textiles, cosmetics and home furnishings. He and fellow retailers who have participated in the festival hope sales will pick up towards the end of the event on 20 August.
Experienced retailers say they cannot afford to boycott the festival despite its disadvantages. Tamer Bayoumi, owner of a menswear factory, said that despite encountering low sales and high participation fees for the past four years, he still intends to take part in the festival every year. "There is one main advantage. This festival provides free advertising for my products. It is through this event and others that I can meet with buyers who later seek my product and eventually become permanent customers," he said.
The majority of participant retailers have their eyes set on this goal -- to be able to reach a wider consumer base. Due to a shortage of the necessary funding for advertising and marketing, small and medium-sized enterprises find it unfeasible to achieve this goal on their own.
"If I can only cover the participation expenses, it would be great," Bayoumi said.
Under the present system, large companies rent space from the General Fair Grounds and Exhibitions Authority then lease it to participant traders and companies. "The square metre costs LE850 during the festival, which is quite steep. If my net profit in selling a certain item is LE5, how many items would I have to sell to make up for the LE8,500 I paid for the 10 square-metre show area I rented out during the festival?" Bayoumi said.
Shops that have chosen to participate in the festival are no luckier. "The participation fees are LE300, which is not much, but there are hardly any sales. I wonder what this festival is all about," said Samir Fathi, a salesperson in a downtown shop.
Under the circumstances, many store owners do not offer any real discounts. "I introduce no special discounts. I sell at the wholesale price," Fathi said, explaining that since customers become tough bargainers during the festival, he begins with a higher price so customers can bring it down without diminishing his profit.
Inspite of this all, the number of participants in the festival are on the rise. This year, 1,000 companies, 3,000 traders and 224 hotels have taken part.
To lure in a larger number of participants, the festival management has offered more incentives this year. Every week, one lucky buyer is the recipient of a LE100,000 prize and one trader wins a sum of LE10,000. The total value of the prizes given out during the month is estimated at LE1 million.
Also, if goods bought during the festival exceed LE500 in value and are to be shipped abroad, they are sales tax free. Last year, customers had to buy LE4,000 worth of goods to enjoy this facility.
"To make it easier for customers, the sales tax will be reimbursed at ports, instead of at banks as was the case in previous years," said Abdel- Moneim Seoudi, head of the Egyptian Federation of Industries and head of the Higher Executive Committee of the Festival.

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