UAE consumers are making adjustments to their spending habits due to rising inflation rates across the world.
According to the latest data from YouGov’s Global FMCG/CPG & Retail whitepaper 2023, which explores purchasing habits in a cost-of-living crisis, a significant portion of UAE consumers have experienced a decrease in disposable income over the past year.
Categories most likely to be affected by inflation are toys, puzzles, games, books, and alcohol, where consumers are more likely to reduce or eliminate their spending rather than increase it.
To manage their expenses more effectively, UAE consumers are adopting several smart shopping tactics.
Over a third of consumers (35 percent) have opted to shop at budget or cheaper stores, while a similar proportion (34 percent) compare prices. Maintaining a tight budget is also popular (34 percent), along with using discount codes or coupons (32 percent) and waiting for sales to purchase desired products (31 percent).
The report reveals that over two in five consumers (44 percent) in the UAE have seen a decline in their disposable income, while only 22 percent have witnessed an increase.
The negative impact on disposable income outweighs the positive by a ratio of two to one.
UAE consumers over age 35 ‘hit hardest by inflation’
When analysing the data by age groups, it becomes apparent that individuals over 35 years old have been hit hardest by inflation, with 53 percent of adults aged 55 and above experiencing the most significant impact.
In contrast, young adults between the ages of 25 and 34 appear to be the least affected.
The study also highlights the products and services that are becoming increasingly price sensitive in the past six months.
Groceries top the list as the primary concern for more than two in five UAE consumers (44 percent), followed closely by clothing and shoes (41 percent).
Other items of concern include mobile phones (35 percent), take-out food (31 percent), air travel (30 percent), electronics (29 percent), utilities (27 percent), cars/vehicles (26 percent), and medicine and healthcare products (25 percent).
Despite the challenges posed by decreasing disposable income, consumers in the UAE remain confident about their future spending.
The report suggests that grocery spending is likely to surge, with 36 percent of respondents planning to increase their expenditure on food and beverages in the next 12 months, while only 22 percent intend to spend less.
Similarly, apparel and household supplies/toiletries are expected to see stable or increased spending.
However, looking ahead, the most anticipated future shopping tactics for UAE consumers include using discount codes to secure price reductions (40 percent) and waiting for products to go on sale (39 percent).
Shopping at budget stores (37 percent), price comparison (37 percent), and maintaining a tight shopping budget (37 percent) are also expected to be prevalent strategies.
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