UAE Supermarkets Say 'Not Realistic' To Absorb All Cost Increases As Diesel Price Jumps 70%

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UAE supermarkets say they are trying to absorb additional costs after diesel prices surged sharply in April due to a rise in global oil prices, but stressed that not all increases can be fully absorbed.

Petrol prices rose by Dh0.80 per litre, while diesel jumped more than 70 per cent, from Dh2.72 to Dh4.69, driven by higher global oil prices amid the US-Israel-Iran conflict.

Higher diesel prices directly impact the bottom lines of transport, logistics, retail and other industries. Some companies absorb these costs, while others pass them on to consumers. Retailers may adjust certain prices to shield customers, while increasing others to protect margins.

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Al Maya Group said it is seeing growing pressure from rising diesel prices, highlighting the direct impact on transportation, logistics and supply chain costs across the retail sector.

Kamal Vachani, deputy CEO, partner and group director of Al Maya Group, said that while the company is committed to absorbing costs through internal efficiencies, a sustainable long-term solution requires a balanced, customer-focused approach.

“We remain dedicated to protecting our customers' interests by managing costs responsibly, ensuring that value, affordability and product availability remain at the heart of everything we do,” he added.

Choithrams, another major UAE retailer, said it will continue to absorb as much as possible through better planning, tighter operations and supplier collaboration.

“There are a number of initiatives we have already taken to reduce costs and improve sustainability. For example, we have removed returns to many suppliers, eliminating double journeys. We have also invested in route planning software to ensure our trucks leave warehouses fully loaded and follow the most cost- and time-efficient daily routes. Through these initiatives, we will try to absorb as much of the increased costs as possible,” said Mark Mortimer-Davies, CEO of Choithrams.

“However, it would not be realistic to say that all cost increases can be fully absorbed. Where pressures persist, some of those costs will inevitably be passed on. Our priority is to remain disciplined, keep any increases measured, protect key everyday items, and continue offering value and quality wherever possible,” he added.

Higher diesel prices feed directly into the cost of moving goods, whether through imports, warehouse transfers or daily store deliveries. For retailers, this increases the overall cost of operations.

Choithrams said the immediate impact is pressure on margins, and over time, it can influence pricing, product availability and delivery frequency. As a result, the focus shifts to efficiency, with fuller trucks, fewer trips and more centralised distribution to manage costs.

Despite the challenges posed by the regional conflict, Al Maya Group reaffirmed its commitment to maintaining product availability across all its outlets.

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