Spending power of UAE consumers remains strong despite concerns over global economy – News

Study finds spending on discretionary items rising

KT file photo

Despite concerns over the global macroeconomic environment, consumer spending power in the UAE remains strong. That’s according to research by leading management consulting firm Kearney into consumer sentiment and buying habits.

Eighty-eight percent of respondents highlighted concerns about global market volatility and rising inflation, and 83 percent pointed to higher prices for goods purchased in the past three months.

Food and beverages (85%), transportation including gas prices (77%), restaurants and hotels (72%), clothing and footwear (70%), and electronics (68%) saw the biggest price increases. However, despite concerns and the apparent price hike, consumers do not expect their spending to be affected as more than half (56%) plan to make major household purchases (Dh1,000+) in the next six months.

“Overall, the country’s strong economic fundamentals and continued favorable policy changes for businesses and individuals have given consumers confidence in their purchasing power, regardless of the macroeconomic environment.

This is further reinforced by the fact that UAE residents reported a 16% increase in spending on discretionary items compared to 2021, a trend we expect to continue into the new year,” said Kearney Middle East Partner Debashish Mukherjee commented.

Online shopping remains a popular channel for UAE shoppers, mainly due to ease of purchase (66%), saving money (62%), wide variety (51%) and ease of delivery (48%). When it comes to shopping in-store, the importance of in-store experience and convenience has increased by 36% and 26%, respectively, compared to 2021.

“During and after the pandemic, many retailers took an omni-channel approach to ensure a buffer against business impact. With online shopping also growing steadily, retailers now more than ever need to build stronger brand connections and offer new a more engaging in-store experience,” added Mohammed Dhedhi, Partner, Kearney Middle East.

Mukherjee concludes: “By keeping an eye on the changing face of retail and adapting their strategies, key stakeholders in retail can capitalize on this positive local sentiment. This will ensure they remain relevant and satisfy consumers. needs to remain competitive.”