The UAE retail economy has now grown quarter-over-quarter in comparison to 2019 for five quarters in a row, and moreover across all sectors, according to Majid Al Futtaim’s Q3 2022 State of the UAE Retail Economy report released this week.
Majid Al Futtaim, the Middle East’s largest mall operator, in its point of sale (POS) data displayed overall consumer spending as up 20 per cent on an annual basis from January to September 2022 compared to the same period a year ago.
According to the report, retail spending grew by 15 per cent annually within this nine-month period, whilst non-retail expenditure climbed 29 per cent.
Consumption also rose 12 per cent in the third quarter until September end compared with Q3 2019. This was driven by an uptick in fashion and accessories at 51 per cent as well as watches and fine jewellery at 62 per cent.
In fact, the increase in fashion spending outpaced other categories in the nine-month period, climbing 23 per cent on the year and gaining 25 per cent on pre-pandemic 2019 levels.
On a quarterly basis, Q1 from January to March displayed the strongest retail sales so far in 2022, growing 44 per cent for the first nine months compared with the same period in the year prior.
General retail spending — which includes food and beverage, pharmacy and health, hotels, duty-free, electronics and home furnishings — rose 13 per cent in the first nine months of 2022 when compared to the same period the year earlier, contributing 40 per cent to the overall growth of the UAE retail economy.
The report by Majid Al Futtaim notes the continued sharp rise of e-commerce, with sales forecasted to increase by 22 per cent this year, exceeding $6 billion and putting the market on course to reach $9.2 billion by 2026.
E-commerce spending rose 34 per cent between January and September relative to the same period the previous year, with digital sales now accounting for 11 per cent of total retail purchases.
Tourism additionally boosted retail growth, with duty-free spend increasing by 45 per cent.
Purchases in hypermarkets and supermarkets were up by 12 per cent between Q1 and Q3 2022 from a year earlier, with brick-and-mortar stores contributing to 63 per cent of this growth.
Easing worries around inflation, a long weekend, and rising tourist numbers contributed to the positive performance of the UAE retail economy as the overall economy remains on course to record its strongest annual GDP growth since 2011.
Alain Bejjani, CEO at Majid Al Futtaim – Holding, said: “Another strong quarter for the UAE retail economy showcases notable sector-wide resilience and reinforces the country’s steady march towards a return to sustainable growth,” reports The National.
The UAE economy, which had already rebounded well from the pandemic-induced slowdown in 2021, has picked the pace up further this year. According to the UAE Central Bank, the economy is set to expand by 5.4 per cent in 2022.
Bejjani said that maintaining forward-thinking government initiatives that underpin the progress in retail makes the UAE highly attractive to international businesses.
“With all indicators pointing to a strong fourth quarter this year, and the lifting of Covid-19 restrictions, the UAE has put the pandemic-related turbulence firmly in the rear-view. We only need to consider the ongoing opportunity, security, and safety this nation offers to see why the world continues to flock to the region to build their future here,” Bejjani told Zawya.
