The UAE’s retail economy has seen 14 per cent growth in the first quarter of this year compared to 2019, according to Majid Al Futtaim’s State of the UAE Retail Economy report.
The report attributed the increased spending to tourism amid the Expo 2020 event. Hotels reported their highest occupancy for four consecutive weeks in February and March.
Hypermarket and supermarket purchases accounted for 24 per cent of growth, increasing 10 per cent over the three years.
Online grocery shopping accounted for 12 per cent of the market, an increase from 3 per cent in 2019.
Fashion sales, including clothing, accessories, jewellery, watches and non-luxury items, accounted for 15 per cent of the growth.
Majid Al Futtaim reported an eight per cent reduction in footfall in the first quarter of this year compared to 2019.
Yet, the retail economy maintained its 14 per cent increase in retail consumer spending thanks to e-commerce spending tripling over this time.
Majid Al Futtaim expects the nation’s retail economy to maintain its progress as consumer spending at its malls is approaching pre-pandemic levels, just one per cent below its past spending value.
In addition, tourism is expected to exceed pre-pandemic levels this year.
In Majid Al Futtaim’s Happiness Lab Survey, 89 per cent of respondents indicated confidence and optimism in the nation’s retail economy, even amid rising prices.
“We must take stock of the tremendous economic recovery underway and acknowledge the transformation experienced over the last 24 months,” said Alain Bejjani, CEO of Majid Al Futtaim.
“While the UAE will still face some headwinds throughout the year, notably price pressures and the prospect of interest rates edging higher, the data shows the fundamentals are strong.”
The survey also revealed that 50 per cent of respondents planned to take advantage of the Holy Month’s sales and promotions with increased spending on groceries, clothing, shoes, accessories, electronic and household appliances.
“The report also shows that industries, sectors and businesses have adapted swiftly to new working methods and have supplied new consumer trends and demands using ingenuity and innovation,” Mr Bejjani said.
“The encouraging signs we witness from these past three months will life the UAE towards a stronger economy.”
Majid Al Futtaim interprets this consumer intention as another rebound towards pre-pandemic normalcy.
