UK Ramadan Spending Surges to £1.3 Billion Annually

Did you know that the spiritual month of Ramadan in the UK isn’t just about fasting and prayer? It’s also become a surprisingly powerful engine for economic activity! New research from the think tank Equi reveals that the UK’s Ramadan Spending could be worth a staggering £1.3 billion annually. That’s a figure that has potentially quadrupled in the last decade! Forget just quiet contemplation; this sacred month is also fueling a significant surge in consumer activity and charitable giving within the British Muslim community. Let’s explore how this £1.3 billion injection of Ramadan Spending is making waves across the UK economy, especially when broader economic growth has been a bit sluggish lately.

This remarkable surge in Ramadan Spending offers a compelling narrative of faith and finance intertwining to create a tangible impact on the national economic landscape, especially at a time when broader UK economic growth has been described as “struggling.” Equi’s report, “Ramadan: Its Value to British Society and the Economy,” provides the first truly comprehensive analysis of this phenomenon. Their estimations reveal that Muslim consumers in the UK contribute approximately £642 million each year towards food, travel, and clothing in preparation for and during Ramadan.

Furthermore, the spirit of generosity inherent in the holy month sees an estimated £359 million channeled into charitable donations. Beyond direct consumer spending, mosques across the UK play a vital role, providing an estimated 3.8 million free iftar (fast-breaking) meals at a collective cost of around £15 million. This collective financial activity underscores the significant economic footprint of Ramadan Spending in the UK.

Related: Ramadan Shopping: Essentials, Food, and Decor Deals

A Decade of Exponential Growth in Ramadan Spending

Dr. Mamnun Khan, the author of Equi’s report, highlights the extraordinary growth trajectory of the Ramadan economy. “While this is the first comprehensive study of its kind, we estimate that the overall Ramadan economy has grown approximately fourfold since 2015,” Dr. Khan stated. This estimation is based on a combination of data, including significant increases in supermarket sales during Ramadan, which have reportedly tripled since 2015 and are now estimated at up to £342 million, alongside substantial growth in non-supermarket areas such as fashion, gifting, and, notably, charitable giving.

This exponential Ramadan Spending growth narrative stands in stark contrast to the more modest expansion of the UK’s overall Gross Domestic Product (GDP), which has grown by approximately 11.8% since 2015, according to House of Commons research. Recent figures from the Office for Budget Responsibility further indicate a UK economic growth of just 0.1% in the final quarter of 2024, with an overall growth of 1.1% for the year. This comparison underscores the dynamic and increasingly important role of Ramadan Spending within the broader UK economic context.

Mainstream Retail Embraces the Ramadan Opportunity

Over the past decade, mainstream supermarkets and retailers in the UK have increasingly recognized the significant purchasing power associated with Ramadan Spending. Alongside the UK’s extensive network of 47,000 convenience stores, these retailers are estimated to generate between £228 million and £342 million in direct Ramadan sales. This has been accompanied by substantial investments in their supply chains, ranging from £159 million to £274 million, to meet the specific demands of Muslim consumers during this period.

Equi’s report also notes the positive impact of retailers developing more “inclusive” brands that specifically cater to the needs and preferences of the Muslim community, making them more likely to benefit from the substantial “Muslim pound” and the surge in Ramadan Spending. This growing engagement from mainstream retail highlights the increasing integration of the Ramadan economy into the broader UK commercial landscape.

A Call for Recognition and Strategic Integration

Launching the Equi report, Professor Javed Khan OBE, managing director of Equi, emphasized the need for both the government and businesses to actively recognize and harness the considerable economic and social benefits of Ramadan. He advocated for campaigns such as “Buy British” to explicitly include British halal products, thereby supporting local Muslim-owned businesses and further stimulating Ramadan Spending within the national economy. “This is a timely opportunity for government and industry to act to maximise the month’s positive impact for our communities,” Professor Khan asserted.

Equi’s report makes several key recommendations, urging the government to formally acknowledge and integrate the Ramadan economy into its economic planning, to provide targeted support for the growth of British Muslim businesses, and to issue clear guidance to employers on best practices for supporting their Muslim employees during the month of Ramadan. These recommendations underscore the potential for even greater economic and social benefits if Ramadan Spending and the needs of the Muslim community are strategically considered within broader national frameworks.

Ramadan Spending: A Comparative Economic Force

The sheer scale of the UK’s Ramadan economy, estimated to be between £800 million and £1.3 billion, positions it as a significant contributor to the national financial landscape. To provide a comparative perspective, Equi’s report points out that this figure may now exceed the value of the UK sea fishing industry, which was worth £1.1 billion in 2023. Furthermore, the rate of growth in Ramadan Spending is likely outpacing the overall growth of the UK economy, highlighting its increasing relative importance. This comparison underscores the economic dynamism associated with Ramadan and the potential for this faith-driven spending to play an even more prominent role in the UK’s economic future.

Government Acknowledgement and Future Engagement

While Equi’s report calls for greater formal recognition and integration of the Ramadan economy, there have been some positive signs of government engagement. At a special iftar celebration held recently, Business Secretary Jonathan Reynolds acknowledged the “remarkable surge in donations from Muslim communities each year” during Ramadan. This public acknowledgment suggests a growing awareness within government of the significant philanthropic contributions associated with the holy month, a key component of overall Ramadan Spending.

However, Equi’s report notes that neither the Department for Business and Trade nor the Department for Work and Pensions responded directly to the specific recommendations outlined in their research, indicating that further engagement and concrete policy actions may be needed to fully harness the economic and social potential of Ramadan.

The Untapped Potential of the Ramadan Economy

The findings of Equi’s report paint a compelling picture of the significant and growing economic impact of Ramadan in the UK. The substantial Ramadan Spending on food, travel, clothing, and charitable donations, coupled with the valuable contributions of mosques in providing free iftar meals, collectively represents a powerful economic force. As the UK navigates a period of modest overall economic growth, the dynamism of the Ramadan economy offers a bright spot and a potential avenue for further economic activity. The UK’s Ramadan Spending fuels a substantial £1.3 billion economic activity annually, highlighting its increasing significance within the nation’s financial landscape.

This article has illustrated how heightened retail engagement, a notable increase in charitable contributions, and vital community support through initiatives like free iftar meals collectively drive this impressive figure. Recognizing and strategically supporting this faith-based economic engine presents a key opportunity for the government and businesses to foster overall economic growth, strengthen local Muslim enterprises that cater to the specific demands of Ramadan commerce, and enhance social cohesion across diverse communities throughout the UK. As Ramadan’s economic influence continues its upward trajectory, a deeper understanding of its multifaceted impact on UK markets and society will be increasingly crucial for informed policy decisions and inclusive business strategies, ultimately contributing to a more prosperous and unified future for all.