92% Consumers Are Confident About UAE Economy: Majid Al Futtaim
The UAE retail economy continues to show robust signs of recovery, surpassing 2019 levels by achieving a 4.5 per cent growth in overall consumer spending in 2021 and presenting a positive outlook for 2022. Unsurprisingly, eCommerce flourished in 2021 as consumers continued to prioritise convenient shopping experiences. POS (point of sale) data revealed a 104 […]
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The UAE retail economy continues to show robust signs of recovery, surpassing 2019 levels by achieving a 4.5 per cent growth in overall consumer spending in 2021 and presenting a positive outlook for 2022.
Unsurprisingly, eCommerce flourished in 2021 as consumers continued to prioritise convenient shopping experiences. POS (point of sale) data revealed a 104 per cent increase in online shopping spending in 2021 compared to 2019 with the majority of online spending by residents in hypermarkets or supermarkets or general retail online offerings, rising 46 per in Q4 2021 from the third quarter, according to Majid Al Futtaim, the shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia.
Data revealed that tourism was a key driver for growth, seeing tourist expenditure increasing by 22 per cent in 2021 compared to 2019, and tourist spending in Q4 accounting for 74 per cent of the increase. The last quarter of 2021 also accounted for 16 per cent of GDP in the UAE in 2021 via direct and indirect spending.
According to Majid Al Futtaim’s happiness lab survey, optimism about the future continued to improve, reaching 33 per cent in Q4 2021, up from 29 per cent in the previous three months.
Consumer confidence also increased, with 92 per cent of respondents stating that they believe the UAE economy is in good shape. A modest improvement in shopping mall footfall was also recorded, with Majid Al Futtaim experiencing an 11 per cent increase in its malls in Q4 compared to Q3 in 2021.
Alain Bejjani, Chief Executive Officer, Majid Al Futtaim Holding, said: “The UAE has made tremendous strides over the last 12 months to positively recover from the ongoing effects of the pandemic. Data from our latest report is evidence that a strong fourth quarter boosted the economy, finishing the year on a high note, with all sectors reporting growth or continued momentum.
“Our research also suggests that consumers have regained faith in the UAE’s economic resilience, reflected in higher spending across all retail sectors. Expo 2020 has rightly shone a spotlight on the region’s vibrancy and investment opportunities, the real estate market, for example, has seen healthy and sustained growth in 2021, recording its best performance since 2014.”
Consumer spending in non-luxury fashion and accessories also increased, rising 24 per cent on Q3 2021, in part due to many brands introducing online offerings to complement physical stores.
Bejjani added: “We have witnessed an increasing appetite for digital experiences, particularly for high-quality omnichannel retailing. Shopping trends like webrooming, showrooming and the use of virtual reality will continue to shape the future of retail and we remain confident that customers will continue to seek out experiences that combine the finest features of eCommerce and physical retail when it comes to meeting their demands in 2022.”
As new ways of shopping take hold, and convenience is prioritised, contactless payments remain on the up. Majid Al Futtaim Carrefour transactions show that the share of card transactions increased to 53 per cent in 2021 from 40 per cent in 2019, while cash transactions dropped from 60 per cent to 47 per cent.
Heightened consumer awareness and engagement with sustainability is also on the rise showcasing a behavioural shift that is here to stay and poised to be a key theme in 2022. Findings show that 57 per cent of the population say they need help to reduce the plastic they use, while the majority want to buy from brands that can demonstrate they are sustainable. This is in line with Majid Al Futtaim’s commitment to phase out single-use plastic by 2025 and to becoming Net Positive by 2040.
Bejjani said: “The Q4 State of the UAE Retail Economy report provides evidence that the country’s comprehensive vaccination efforts, the adoption of new working practices and global events like Expo 2020 have contributed significantly to driving forward the UAE’s economy over the last 12 months. We have now entered 2022 with a renewed sense of optimism and a belief that the region is poised to benefit from continued policy innovation, a rebound in tourism and a gradual global recovery.”
