Overall consumer spending in the UAE will increase by 19% in 2022 compared to the previous year, Majid Al Futtaim, a leading shopping center, community, retail and leisure pioneer in the Middle East, Africa and Asia, has revealed in his latest report.
Majid Al said there was a notable 13 per cent increase in spending in the retail economy for the year, which includes leisure and entertainment (29 per cent), fashion (25 per cent), hypermarkets and supermarkets (11 per cent) and general retail (9) Futtaim in its “The State of the UAE Retail Economy” Q4 report.
The growth was driven by an increase in the number of international tourists visiting the UAE, which more than doubled to 14 million by 2022, boosted by major events such as the FIFA World Cup in neighboring Qatar, the report said. race.
In terms of macroeconomic trends, 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 boost are broad and span oil and non-oil sectors. 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 of 6.6%, driven by the government’s efforts to attract investment and boost tourism in the country.
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 3% over the year, the report said, but total spend in the sector was up 11% over the previous year, suggesting basket values are moving towards smaller basket values and more frequent transactions.
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 an additional spend of about AED5.5 billion, it added.
In Majid Al Futtaim’s Happiness Lab survey, 90% of people have 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.
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 the preferred method, according to Majid Al Futtaim POS data.
Fintech solutions such as “buy now, pay later” are growing rapidly, with 45% of consumers using BNPL financing in the past year, up from 21% a year ago.
It added that most of the online spending of residents was in the hypermarket and supermarket sectors, which saw a 40 per cent increase in spending for the year.
The real estate industry witnessed a record-breaking year, with property sales hitting 12-year highs in both volume and value.
According to the report, transaction volumes have increased by 60% compared to 2021, with sales increasing by 76% to AED265 billion last year. The market peaked at 27,000 deals in the fourth quarter, up from 16,000 a year earlier. –trade arab news agency