30 C
Thursday, June 1, 2023

UAE consumer spending to grow 19% in 2022 – News

Majid Al Futtaim report highlights key retail trends in the country

read more…

A Carrefour supermarket in the United Arab Emirates. MAF reported that hypermarkets and supermarkets grew by 11% last year. – KT file

by WAM

published: Saturday, March 18, 2023 at 3:28 pm

A recent report said that consumer spending in the UAE will increase by 19% in 2022 compared to the previous year.

According to Majid Al Futtaim’s fourth quarter report “The State of the Retail Economy in the UAE”, there was a notable 13% increase in spending in the retail economy for the year, which included leisure and entertainment (29%), fashion (25%), hypermarkets and supermarkets ( 11%) and general retail (9%). “The growth is driven by an increase in international tourist arrivals to the UAE, which more than doubles to 14 million by 2022, fueled by major events such as the FIFA World Cup in neighboring Qatar. Long-term growth ,” the report said

The UAE posted its strongest annual GDP growth since 2006, jumping to 7.9% in 2021 from 3.9%. The drivers of this growth are broad and span oil and non-oil industries. As expected, oil remained a major component as average oil prices rose about 38%, leading the sector to rebound to growth of 11.4% after contracting 0.7% the year before. The non-oil economy showed strong growth at 6.6%, boosted by government efforts to attract investment and boost tourism in the country.

Consumer Behavior Trends

In the last quarter of 2022, people became more cautious about their spending, opting for discounts and deals on essential items and reducing purchases of non-essential items such as electronics. Average spend per transaction in hypermarkets and supermarkets fell by 3% over the year, but total spend in the sector rose 11% over the previous year, showing a move towards smaller basket values ​​and more frequent transactions direction development.

The extended 2.5-day weekend also weighed on growth in consumer spending, with weekend retail sales up 11.3% over the previous year. According to Majid Al Futtaim point-of-sale (POS) data, this translates into approximately AED5.5 billion in additional spending.

Some 90 percent of respondents to Majid Al Futtaim’s Happiness Lab survey had a positive view of the current economic situation in the UAE. Majid Al Futtaim POS data suggests that this optimism is evidenced by the peak in absolute consumer spending in the fourth quarter of 2022, which accounts for 29% of all retail economic activity for the year.

A booming digital economy

Analysis shows that the UAE has the fastest growing e-commerce market in the world, with sales expected to reach $9.2 billion by 2026. Spending in this space will peak in the fourth quarter of 2022, a full-year increase of 20% compared to 2021, with three – a quarter of consumers saying digital payment methods are preferred, according to Majid Al Futtaim POS data.

Fintech solutions such as buy now pay later (BNPL) are growing rapidly, with 45% of consumers using buy now pay later (BNPL) financing in the past year, up from 21% a year ago.

The majority of online spending by residents occurs in the hypermarket and supermarket sectors, where spending rose by 40% during the year.

Source link

Related Articles

United Arab Emirates must reform its dismal rights record to help ensure COP28 climate conference success

Countries at the climate meeting in Bonn on June 5 should urge the United Arab Emirates to improve its dismal human rights record...

King’s coronation portrait unveiled in Dubai, hails ‘unity’ with UAE

The UK and the UAE "share a similar vision for the...

Turkey, UAE approve $40 billion trade deal after Erdogan win

ANKARA - The United Arab Emirates and Türkiye on Wednesday approved a cooperation agreement The goal is to increase bilateral...

UAE announces over $1.6B in industrial projects, including hydrogen plants

Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, on Wednesday announced more than 30 industrial projects worth more than AED6...

Latest Articles