Retail UAE shoppers ready to spend, but retail outlook remains tough By Gavin Gibbon January 15, 2025, 7:48 AM Alamy More than a quarter of consumers in the UAE now report shopping at discount groceries, says Hisham Abdul Khalek Survey of 15,000 consumers UAE shoppers more optimistic But pressure on margins persists The spending of UAE consumers is expected to increase this year, but retail analysts have warned this is unlikely to be a silver bullet that halts shrinking margins. A survey of more than 15,000 shoppers in nine countries, published by consultancy AlixPartners, has found the percentage of UAE consumers intending to spend more is 13 points higher than the proportion intending to spend less. The average across the nine countries, which include Saudi Arabia as well as the US and China, is a 12-point decline, with 31 percent of consumers saying they plan to spend less and just 19 percent intending to shop more. The UAE’s net score has risen from 2 percentage points in 2024, despite global economic uncertainty and inflationary fears. It will come as a relief for the owners of non-oil companies operating in the Emirates, who have been relying heavily on discounting to support sales. But Hisham Abdul Khalek, managing director of AlixPartners, told AGBI that although consumer sentiment could alleviate some of the pressure on margins, it was “unlikely to completely address the broader challenges facing the industry”. “The market remains highly competitive, with significant pressure from discounters and online players, which continue to claim a growing share of consumer spending,” he said. In a December survey of customer behaviour and preferences in the UAE and Saudi Arabia, consultancy Oliver Wyman found that value ranked first both in terms of customer satisfaction and what motivates them to shop in a particular outlet. UAE and Kuwait companies struggling to hire staff Mena ecommerce up 44% in November Opinion: GCC well-placed to be global growth standout Abdul Khalek said more than a quarter of consumers in the UAE now report shopping at discount groceries such as Nesto and Viva. “This shift underscores the growing appeal of discount retailers,” he said. Shoppers under the age of 45 are expected to lead the surge in spending across retail segments, according to AlixPartners, driven by higher disposable income and the demands of starting and expanding households. Consumers aged 45-64 are more likely to maintain their current spending habits or significantly reduce their expenditure.