UAE Consumers Lose Appetite For Shopping-Nielsen's Retail Audit Tracking Study

UAE Consumers Lose Appetite For Shopping-Nielsen's Retail Audit Tracking Study

With consumers not willing to spend on anything other than bare necessities, the UAE's retail sector is passing through a phase worse than what it experienced during 2009-10. Gulf shoppers are turning hesitant over spending even at the supermarkets. This is reflected in the indifferent growth in the region's consumer packaged goods category. In the UAE, the category has shown a decline of 1% year-on-year, and 3% in the first five months of 2016, according to Nielsen's "Retail Audit Tracking" study. As for Saudi Arabia, consumer product demand has been "more resilient", recording a growth of 7% year-on-year and 5% in the first five months of this year. With consumers clearly watching their wallets, retailers ought to change their strategy. Those among them who can give a value proposition stand a better chance of catching whatever spending is taking place.

Current global economic conditions, oil price fluctuations, decreased tourism activity, an unstable real estate market in the UAE, and higher defence spending in Saudi Arabia over the last year have "pressured the growth rate of the region's consumer goods segment". The changing economic landscape has made the job market more challenging, which has subsequently affected disposable incomes. Where possible, consumers prefer to chase discounts or promotions when they want to buy something. The percentage of respondents who have admitted to changing their spending patterns to save on household expenses is also up this year: 69% of Saudi Arabia respondents in Q2-16 and 73% of UAE respondents.