The report reveals that some markets will be particularly susceptible to inflation.
The Mastercard Economics Institute report has factored in the four key aspects that will continue to shape the global economic environment — high-interest rates and housing, trading down and shopping, prices and preferences, and shocks and omnichannel.
UAE consumers are getting thriftier
Broad spending is forecast to remain stable in the face of inflation, with consumers switching to budget-friendly brands and seeking the best value. Globally, grocery shoppers completed 31 per cent more trips to the store last year compared to 2019 – which is attributed to the aspiration to clamp down on food waste – while their average spending per visit was around nine per cent lower.
Since September 2022, the number of grocery shopping trips among UAE residents has surged by 28 per cent compared to September 2019. Yet, the average spent was lower by 21.4 per cent.
Mastercard Economics Institute expects inflationary pressure to ease in 2023, with the average inflation rate of developed economies falling from 7.1 per cent year-on-year in Q4 2022 to 3.1 per cent year-on-year in Q4 2023.
Apparently, businesses with an omnichannel presence have better chances to weather the storms by capitalising on flexibility. According to the analysis, a robust multichannel strategy in place has been responsible for an extra six per cent in retail sector sales through 2022.
Equally important, small omnichannel clothing brands outperformed online-only and brick-and-mortar-only counterparts, growing 10 per cent and 26 per cent faster, respectively.
The benefits of honing the omnichcannel strategy were also illustrated by The 2022 Global Shopping Index: UAE Edition survey, released two months ago by PYMNTS and Visa Cybersource. It found that 72 per cent of UAE in-store shoppers would use their smartphones to enhance their shopping experience.