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Monday, March 4, 2024

UAE consumer spending to grow 19% in 2022


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.

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. ——Khaleej Times


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