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UAE sees 13% surge in consumer spending in 2023

This is backed by a boost in retail in the Gulf state, a report notes.

UAE sees 13% surge in consumer spending in 2023
[Source photo: Krishna Prasad/Fast Company Middle East]

The UAE has seen a significant rise in consumer spending. As per Majid Al Futtaim’s State of the UAE Retail Economy report, consumer spending witnessed an annual increase of 13% in 2023, driven by heightened expenditure on retail goods.

Various sectors have propelled retail spending, with fashion witnessing a remarkable 31% year-on-year increase, general retail up by 16%, leisure and entertainment by 15%, and hypermarkets and supermarkets by 3%. Meanwhile, non-retail spending saw a consistent annual increase of 12%.

In particular, the final quarter of 2023 accounted for 27% of the total retail economy spending for the year. The report attributes this surge to events such as COP28 hosted in Dubai and increased spending during the Christmas and New Year holidays.

Meanwhile, Majid Al Futtaim’s Happiness Lab survey revealed consumers’ growing preference for discount shopping. Nearly 47% of respondents preferred discounted items, while 20% said they would switch to more economical brands.

“Over the past 12 months, it is the UAE’s proven resilience to external pressures, coupled with progressive policy-making and an investor-friendly business environment, has seen the UAE further strengthen its position as a lighthouse for the MENA region,” Ahmed Ismail, chief executive of Majid Al Futtaim, said.

Moreover, the report added that the country has similarly experienced a surge in e-commerce, as it doubled since 2019, from 5% to 12% in 2023, with approximately 70% of transactions attributed to mobile phones. In 2023, e-commerce consumer spending in the UAE’s retail sector grew by 15% 

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