The UAE’s retail economy surpassed 2019 levels with an increase in consumer spending of 4.5 percent in 2021, according to point-of-sale (POS) data from Majid Al Futtaim.
Compared to 2019, tourist spending in the UAE increased 22 percent in 2021 while Majid Al Futtaim said its shopping malls saw an 11 percent increase in footfall during the fourth quarter of last year compared to the year-earlier period.
It added in a new report that e-commerce flourished in 2021 with spending up 104 percent compared with 2019 POS data.
The company’s fourth edition of its quarterly State of the UAE Retail Economy report confirmed “the most significant increase in spending so far, paving the way for 2022 to continue an upward trajectory”.
It noted that Q4 2021 marked a standout period for consumer sentiment and overall spending, boosted by Expo 2020, improvements in global vaccination rates, and an uptick in international travel.
The last quarter of 2021 also accounted for 16 percent 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 percent in Q4 2021. Consumer confidence also increased, with 92 percent of respondents stating that they believe the UAE economy is in good shape.
Alain Bejjani, CEO, 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.”
POS data revealed a 104 percent 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 percent in Q4 from Q3. Consumer spending in non-luxury fashion and accessories also increased, rising 24 percent on Q3, 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 e-commerce and physical retail when it comes to meeting their demands in 2022.”
The report also said that heightened consumer awareness and engagement with sustainability is also on the rise showcasing a behavioural shift which is poised to be a key theme in 2022.
Findings showed that 57 percent 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.
Bejjani said: “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.”
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