Consumer confidence in the UAE has reached its highest level in 10 years, with overall spending ahead of levels last seen before the pandemic, according to data from third-quarter (Q3) update of a landmark retail sector report.
Point-of-sale (POS) data highlights that Q3 2021 was the first period since the pandemic struck when consumer spending increased by 7% and exceeded levels seen in 2019, according to the third quarterly edition of State of the UAE Retail Economy released by Majid Al Futtaim, a leading shopping mall, and leisure pioneer across the Middle East, Africa and Asia.
The data further points to a significant improvement in both the frequency and level of comfort in visiting shopping malls, where year-on-year footfall in Q3 improved by 18% between 2020 and 2021. General retail categories have seen consumer spending grow by 6% between Q2 and Q3 2021, mainly driven by an 18% increase in spending on electronics, mirroring a similar pre-pandemic uptick in electronics spending between Q2 and Q3 2019.
Unsurprisingly, e-commerce also continues to gain momentum across the UAE, indicative of a step-change in consumer habits brought about by Covid-19. Data reveals that the overall value of e-commerce sales in Q3 2021 was 34% higher than the same period in 2020, with consumers spending a quarter more on e-commerce in the year to September compared to the same period in 2020.
The fashion sector was a major contributor, with an increase of 170% compared to the same period a year earlier. Carrefour e-food sales in the UAE increased by 171% during the year-to-date until September 2021 compared with the same period last year, with over 1.4 million orders fulfilled.
Alain Bejjani, CEO, Majid Al Futtaim, said: “Looking back over the first nine months of the year, it is clear to see the tremendous progress the UAE has made in recovering from the impact of a global pandemic. Data from the Q3 State of the UAE Retail Economy highlights the continued and far-reaching impact of the country’s robust vaccination programme, which has further bolstered consumers’ sense of cautious optimism and the subsequent return to sustainable growth across the retail economy.
“What is also clear is that ‘getting back to normal’ is not simply reverting to pre-pandemic business activities. While the latest report indicates that the UAE is undeniably on the road to recovery, the data confirms consumers’ continued shift towards omnichannel experiences. As we look ahead, we must continue to challenge ourselves to innovate in this space, ensuring we can continue to meet the evolving behaviours, wants and needs of our communities today, tomorrow and for years to come.”
A desire for fun experiences after the easing of pandemic measures has also meant a boost for the leisure and entertainment sector, which recorded a growth of more than 4% between Q2 and Q3. Hotels bucked the trend in the hospitality sector, with an 11% increase in consumer spend in Q3 2019, up 34% compared to the third quarter last year. This comes as borders continue to open and tourism returns.
The pandemic has also seen a shift in behaviour around the consumption of food and drink, with food deliveries remaining on the rise. VOX Cinemas recorded strong growth for the home delivery of movie snacks such as popcorn, nachos and slushies.
Sales recorded this year to September were 38% higher than those recorded in 2020. Year-on-year, Q3 2021 was 85% higher than Q3 2020 and this year, delivery sales increased by 30% between Q2 and Q3.
Looking forward, tourism is picking up across the region and looks set to continue into the fourth quarter as travel restrictions relax even further, and a major boost is expected from Expo 2020Dubai opening its doors to the world, further supported by the UAE’s highly successful vaccination programme. Data from Q3 has recorded an 8% increase in the average spend per person during their stay in Dubai.
The residential property market continues to capitalise on pent-up demand, and Dubai recorded its busiest summer since 2009 with over 16,000 transactions in Q3, valued at AED43.5 billion ($11.8 billion). – TradeArabia News Service