Retail spending in the GCC is projected to reach $300 billion by 2028, with the market rapidly evolving to accommodate changing consumer preferences, retail trends, and buying behavior. 

According to a recent NielsenIQ report, UAE shoppers exhibit more brand loyalty than Saudi Arabia. Both countries are witnessing strong economic growth. While the UAE is experiencing broad-based growth in tourism, construction, and financial services, Saudi Arabia’s market has leveled off after last year’s high performance.

As per the report, GCC shoppers are highly sensitive to promotions. “The UAE’s diverse population and differences in disposable income have created a polarized FMCG market,” said Andrey Dvoychenkov, APP cluster leader at NielsenIQ. 

Additionally, promotions are used more intensively and efficiently in Saudi Arabia, with temporary price reductions being the most common. “In contrast, Saudi Arabia’s larger population and competitive market dynamics have driven the success of mainstream brands, which offer a balanced mix of quality and affordability appealing to a broad consumer base,” Dvoychenkov added. 

The report outlines consumer preferences that emphasize the importance of quality and convenience, with 72% of UAE shoppers and 71% of Saudi Arabia’s shoppers willing to pay more for quality products. 

The demand for convenience has also risen, validating the growth of smaller formats and e-commerce.

The UAE’s FMCG market is fragmented between affordable and premium brands, while Saudi Arabia’s market leans towards mainstream brands that offer a mix of quality and affordability. The mid-tier segment in Saudi Arabia is more concentrated, leading to fewer brands, whereas the UAE has seen growth in new and premium brands. Key FMCG categories in both regions include beverages, frozen food, and dairy, with declining interest in home care and baby care products.

According to the report, Saudi Arabia’s hospitality, restaurant, and catering (HORECA) sector has witnessed significant growth, particularly in coffee and tea shops, reflecting changing consumer lifestyles.

The tech and digital (T&D) markets in the UAE and Saudi Arabia show varied performance, with organized retail remaining dominant.

The report highlights that premium segments are growing in both markets, with mainstream portfolios facing challenges as consumers shift toward value purchases or aspirational brands. The T&D industry is experiencing exponential growth, with active brands and products increasing by 27% in Saudi Arabia and 28% in the UAE.

Despite the growth in organized retail channels in the UAE, traditional trade remains significantly larger in Saudi Arabia in terms of overall market value. However, independent retailers in the UAE are gaining substantial ground, signaling shifting consumer preferences and heightened competition.

Fast Company Middle East’s Next Big Things in Retail Summit, which will be held on November 12 in Riyadh, will cover key topics in retail, such as experiential retail, traditional store optimization, and e-commerce strategies like social commerce and hyper-personalization. It will also discuss how design and innovation will play a role in reshaping the retail landscape. 

Delegates can register here.