UAE consumers unwilling to compromise quality for lower prices, says report 


The UAE has the greatest quantity of consumers who prioritise product quality over cost in comparison to European countries, according to the Shape of Retail 2022 Report by global services firm Alvarez & Marsal in partnership with market consultancy firm Retail Economics

Consumers habits in the UAE were compared with those in France, Germany, Italy, Spain, Switzerland and the United Kingdom, with 5,250 customers surveyed in April.

Rather than compromise product quality for lower prices, customers in the UAE reported that they are more likely to compromise convenience or positive shopping experiences for product quality.

“Our analysis suggests that the UAE consumer currently has a different set of priorities compared to the majority of European peers,” said James Dervin, managing director of Alvarez & Marsal’s Middle East division.

“In our survey, the UAE demonstrated the highest proportion of ‘quality appreciators’, while also having a keen focus on customer experience and a consistent bias towards emotion-driven value attributes.

“Price appears to be a comparatively low-priority factor in decision-making, with limited expectation that this will change in the forthcoming 12 months.”

Forty-two per cent of consumers surveyed considered product quality as the most important aspect of shopping, reflecting the UAE’s higher average income compared to European countries, said the report.

“We believe this reflects a relatively affluent consumer population with lower exposure to current economic pressures versus European peers, as well as retail’s comparatively prominent role as a leisure and community activity in the UAE and the region more broadly,” Mr Dervin added.

Consumers in the UAE are increasingly regarding sustainability as a crucial element of retail, with 12 per cent seeking brands and products that align with personal values and preferred social causes.

“While price and quality are key factors when making purchasing decisions, the expectation from consumers that retailers act in an ethical and sustainable way continues to grow,” said Erin Brookes, managing director and head of European retail division at Alvarez & Marsal.

“Although investment in sustainability will be required, innovations in the industry, such as upcycled or pre-loved ranges, demonstrate that ethics and sustainability can also create commercial opportunities.”

Twelve percent of consumers also want meaningful interactions with brands, reporting that entertainment and store surroundings add value to shopping experiences.

Amid global and national inflation, 29 per cent of customers indicated that cost of living will influence their expectations of retailers and brands most for the next year.

In addition, 24 per cent said price will be the deciding factor for purchase decisions and are expected to opt for private label and own-brand products and favour discount operators in place of supermarkets.

“Changing consumer preferences coupled with emerging trends such as seamless retail channels, personalisation, evolving operating models, digitalisation and flexible supply chain models will likely further shape the retail landscape in the UAE and are likely to have long-term implications,” said Mr Dervin.

“Recognising emerging trends and responding proactively and with agility can help retailers create a winning strategy for the coming decade.”