Consumer willingness to spend remains strong in UAE and Saudi Arabia

According to Kearney research, consumer buying power in the UAE and Saudi Arabia is expected to remain strong this year despite concerns about rising living costs and global economic uncertainty.

The latest regular survey of global management consultancies on consumer sentiment and buying habits Kearney Residents of the UAE and Saudi Arabia were asked to describe how macroeconomic developments affect their purchase intentions.

The study found that consumers in both countries are closely monitoring global developments, with 8 in 10 consumers in Saudi Arabia and 9 in 10 in UAE concerned about global market volatility and rising inflation.

In Saudi Arabia, 72% of consumers have noticed an increase in the price of goods purchased in the past three months, 11% higher than those surveyed in the UAE. Price increases were most pronounced for food and beverages, transportation including gasoline prices, restaurants and hotels, clothing and footwear, and electronics.

However, despite these concerns and the apparent price increase, consumers in both countries are optimistic about their spending behavior over the next six months, with around half (Saudi Arabia, 46%; UAE, 56%) planning a big family reunion Purchases (a purchases in excess of SAR 1,000 or AED 1,000).

Debashish Mukherjee, a partner at Kearney, said the strong economic fundamentals of both countries played an important role in this consumer behaviour. “Regardless of the macroeconomic environment, strong economic fundamentals and continued favorable policy changes for businesses and individuals give consumers confidence in their purchasing power,” he said.

For example, in 2022, both the UAE and Saudi Arabia will see double-digit growth in spending on discretionary items amidst wars in Europe and geopolitical turmoil. Spending on these items falls, even precipitously, the farther away from home, as consumers brace for worse times.

“Overall, on the retail front, local positive sentiment persists despite global macro headwinds. We expect this trend to continue into the new year,” concluded Mukherjee.