UAE consumer spending stays strong

Online purchasing remains a popular channel for shoppers

UAE consumers are expected to maintain the same spending habits for the next six months, according to a recent survey from Kearney.

While price rose across most retail categories, 16 per cent of consumers surveyed in a poll have reported an increase in spending on non-essential commodities compared to 2021. Debashish Mukherjee, Partner, Kearney Middle East explained that this trend would continue into the New Year.

The trends noted for the first quarter of 2023 are similar to UAE customer spending habits from the fourth quarter of last year. According to Majid Al

Futtaim’s State of the UAE Retail Economy Report published late last year, consumer spending in the UAE jumped 20 per cent annually in the first nine months despite inflation concerns. Retail spending grew by 15 per cent annually in the nine months while non-retail expenditure rose 29 per cent over the same period, said the report.

Upbeat despite concerns

At least 88 per cent of those surveyed expressed worry about the global macro-economic environment, and 83 per cent have also noted an increase in the prices of goods purchased over the last three months. And despite these growing concerns, UAE consumers have yet to plan to reduce their spending for at least the next six months, said the study.

“Overall, the country’s strong economic foundation and continued favourable policy changes towards business and individuals have given consumers’ confidence in their purchasing power, regardless of the macroeconomic environment,” said Mukherjee.

Online purchasing remains a popular channel for UAE shoppers, mainly due to the ease of purchase and savings incurred. Moreover, consumers believe they have more variety and ease of delivery while shopping online.

When it comes to shopping in brick-and-mortar stores, the importance of the in-store experience and convenience increased by 36 per cent and 26 per cent, respectively, compared to 2021.