UAE consumers careful about spending in Q3

Consumers in the UAE and Saudi Arabia are generally optimistic about their personal financial situation but cautious about spend Nielsen research

dubai — Consumers across the UAE and Saudi Arabia were increasingly cautious about their spending in the third quarter of 2018, new research by Nielsen has shown.

The data showed that both the resource-rich economies generally enjoy high levels of confidence; however, consumer confidence in the third quarter of 2018 witnessed a marginal decline by one point in Saudi Arabia and five points in the UAE, compared to levels recorded in the second quarter of the year.

Nielsen’s research also pointed out that consumers in the UAE and Saudi Arabia are generally optimistic about their personal financial situation, but that they have also expressed some concern about job prospects and are largely cautious regarding their spending.

Pakistan recorded the highest confidence level in the region and it also had the highest improvement in confidence over the previous quarter — an increase of 11 points.

Experts have pointed out that the retail industry across the Middle East continues to record a steady performance, especially in the UAE. According to Robert Half UAE, over the last 15 years, the fastest growing sectors within

the UAE have been the hospitality and retail sectors. The UAE continues to see strong demand from international brands that are looking to open retail outlets, pushing the region into position as the seventh most popular destination for retail expansion.

In addition, the Dubai Chamber of Commerce and Industry reported that the retail sector is expected to exceed a $71 billion sales turnover by 2021, despite the introduction of the value-added tax (VAT).

Ahmed Al Khaja, CEO of the Dubai Festivals & Retail Establishment, agreed that the introduction of VAT was a “great challenge” for the industry, but the fact that the rate was decided at a “mere five per cent” helped consumers to quickly get used to it.

“Today, consumers don’t even notice the tax,” he said. “All of them understand why it was introduced and know the benefits of the tax. In addition, VAT is a great exercise in improving efficiencies across the retail sector.”