Eighty-eight per cent of those surveyed by management consulting firm Kearney expressed concerns about global market volatility and raging inflation, while 83 per cent marked an increase in the prices of goods purchased during the last three months.
Yet, UAE consumer spending power is not diminishing in the face of this unstable global macroeconomic environment.
In the retail segment, price increases were most perceptible in the food and beverage category (85 per cent), clothing and footwear (70 per cent) and electronics (68 per cent).
Even so, these economic uncertainties and price hikes are not likely to significantly impact consumers’ spending, with more than half (56 per cent) intending to make a major household purchase (Dh1,000+) in the next six months.
Partner of Kearney in the Middle East, Debashish Mukherjee, said: “Overall, the country’s strong economic foundation and continued favourable policy changes towards business and individuals have given consumers confidence in their purchasing power, regardless of the macro-economic environment.
“UAE residents, in fact, have reported an increase in spending on non-essential items compared to 2021 (16 per cent) reinforcing this, and we anticipate that this trend will continue into the new year.”
Online purchasing channels are still favoured by UAE residents, mainly due to the ease of purchase (66 per cent), saving money (62 per cent), variety (51 per cent) and seamless delivery (48 per cent). Regarding shopping in brick-and-mortar stores, the importance of the in-store experience and convenience has increased by 36 per cent and 26 per cent respectively, compared to 2021.
Another partner of Kearney in the Middle East, Mohammed Dhedhi, said: “During and post-pandemic, many retailers adopted an omnichannel approach to ensure that the business impact was cushioned. With online shopping also on a steady rise, retailers now more than ever need to build stronger brand connections and offer new, more engaging in-store experiences,”
“By closely monitoring the evolving face of retail and adapting their strategies, key stakeholders in the retail sector can capitalize on this positive, local sentiment. This will ensure that they stay relevant and engaged with consumer needs to remain competitive,” added Mr Mukherjee.
Last week, the Mastercard Economics Institute assessed how the global economy might alter consumer habits in the UAE, focusing on grocery shopping.
