Ramadan in the UK: Supermarkets missing a trick to capture the halal market

Photo: The Ramadan aisle at Tesco New Malden in southwest London, UK, on May 26, 2017

UK supermarket heavyweights are getting better at identifying opportunities to promote Ramadan and are becoming increasingly attuned to highlighting halal products for their consumers. However, Rachel O’ Brien, director at UK-based retail consultancy Arc Retail, told Salaam Gateway, “There is a lot more UK supermarkets could do to capture the halal market.”

To meet demand some supermarket chains across the UK are offering special aisles for Ramadan dedicated to halal food and products. During Ramadan and the Eid al Fitr holiday Tesco runs special offers on over 200 products, such as dates, its own-label chapatti flour, as well as discounted electrical items including rice cookers.

“Ramadan is an important time of year for many of our customers and colleagues,” said a spokesperson at Tesco. “To help celebrate, we’re offering a selection of products in store and online,” they added. 

Tesco, the UK’s leading supermarket chain by market share, recently launched Delisia in its UK stores, a wholly-halal brand owned by Germany’s ZMG. It offers a range of convenience meat-based products including sausages, cooked meats and chicken products. Tesco has also opened concessions of halal butchers selling fresh meats within its stores in specific areas of the UK that have higher Muslim populations, including in Bradford where around a quarter of the city’s roughly 531,200 inhabitants is Muslim.

Delisia also launched in Asda in early May with the store historically taking the lead in launching new Ramadan-related ranges and seasonal offers. The retail chain has actively made efforts over recent years to engage with the UK Muslim community. “We are supporting four charities during Ramadan including the As Suffa Institute, which operates an outreach food bank project and homeless project which is active in seven major cities across the UK,” said a spokesperson at Asda.     

Sainsbury’s and Morrisons, UK’s second and fourth biggest chains by market share, didn’t return requests for comment.

Source: Kantar WorldPanel

GROWTH 

In recent years the demand for halal products has soared. “The real turning point for halal in mainstream retail was the publication of the UK 2011 census, which asked respondents their religion for the first time,” said Imran Kausar, co-founder of UK halal food brand Haloodies, which competes with Delisia and is also available in Tesco, Sainsbury’s and Morrisons.

In 2011, 2.7 million, or around 5 percent of the population, identified themselves as Muslim, compared with 1.5 million, or 3 percent of the population in 2001, according to figures from the UK’s National Statistics Office. This is equivalent to an 80 percent increase in the British Muslim community.

In line with this growth, sales of halal produce in the UK hit 2.6 billion British pounds ($3.33 billion) in 2011, estimated the World Halal Forum.

British Muslim spending power is currently pegged at around 20.5 billion pounds ($26.25 billion) and the UK halal market is worth around $5 billion, according to Thomson Reuters.

The halal potential will grow alongside that of the British Muslim population, which, by 2030 is seen growing to 5.6 million, or 8.2 percent of the population, estimates the Pew Foundation.

These growth rates, coupled with the high spending seasons of Ramadan and Eid holidays, could potentially be huge for retailers. But industry players and thought leaders are painting a different picture.

MISSING A TRICK

“UK and European supermarkets are still not making the most of the Muslim pound,” according to Haloodies’ Kausar. “They have a real opportunity to make a lot more, as increasingly consumers require convenience, which mainstream retail is able to provide.”

Ramadan is a key part of the retail calendar, only behind Christmas and Easter. However, despite marketing efforts including retail chains distributing advertising leaflets promoting offers in predominantly Muslim areas, the holy month doesn’t get the same level of promotion as everything else, says Arc Retail’s O’ Brien.  

Retailers are missing a trick as the UK Muslim consumers’ demand for halal has not only ballooned, crucially, it has evolved.

“Much of the food in supermarket special Ramadan aisles is a lot about ethnic food, like rice and samosas,” Jonathan A.J. Wilson, Editor-in-Chief of the Journal of Islamic Marketing, told Salaam Gateway.

“Halal eaters want much more novelty, high quality, interesting food – cuisines that were previously less accessible to Muslims from certain countries of origin,” added Wilson.

A growing Muslim population together with parental emphasis on education has meant professional second and third generation Muslims was created – the Muslim millennial. “This new Muslim middle class has aspirations like any middle class. Better homes, cars, holidays and food. But also a greater need for quality and convenience,” said Kausar.  

Kausar’s brand Haloodies, as well as others such as ieat Foods that is also available across the island in the top four supermarkets, attempts to bridge the gap in the market delivering quality halal products aimed at meeting the needs of Muslim millennials.

Haloodies and ieat Foods also aim to take halal mainstream and make it accessible to all, as well as clean up halal’s reputation in the UK, which has earned a low quality reputation, and has often been mired in fraud, and perceptions of animal abuse.

THE WAY FORWARD

Branding may be key to the way forward. Around 80 percent of halal grocery in UK purchasing still happens in ethnic stores, said Kausar, and mainstream retail in the country has an opportunity to capture a large share of that with the correct halal offering.

“Second and third generation Muslims have said to us in listening groups: ‘We are just like anyone else, we work, we have kids, and when I go to the supermarket I want to buy halal products alongside all my other household goods and I don’t want them to look any different’,” said O’ Brien of Arc Retail Consultancy.  

Across the Channel, France and Germany, which are home to Muslim populations that are almost double the size of the UK’s, are well ahead of Britain in terms of their range of halal retail offerings.

French supermarket chain Carrefour sells halal meats where much of the packaging is the same as non-halal meat items, with the only difference being the ‘halal’ label. “This is a precursor of where the UK halal market is headed,” said O’ Brien.

The needs and spending power of Muslim millennials is likely to increase with the UK and Europe’s mainstream retail market eventually likely becoming the main source of sales of halal grocery products.

“What the UK needs to do now is focus not just on products that are halal, but products that are halal and right for the UK halal consumer,” said O’ Brien.

© SalaamGateway.com 2017 All Rights Reserved