Today's Edition
KHALED KHAWALDEH (ABU DHABI)
The UAE’s consumer retail sector is showing remarkable resilience in the face of global inflation, supply chain disruptions, and cost of living concerns, according to two new reports that offer a comprehensive view of evolving shopper behaviours across the region.
A recent report by NielsenIQ, a global consumer intelligence company, found that despite economic headwinds, UAE consumers continued to spend robustly in 2025.
The Mid-Year Consumer Outlook: Guide to 2025 report found that from April 2024 to March 2025, consumer spending on technology and durables in the UAE reached $5.3 billion, a 2% year-on-year increase. Fast-moving consumer goods (FMCG) spending also surged by 7%, driven by demand for snacks, beverages, dairy, and frozen food. Personal care categories saw a 6% rise in spending, underscoring the continued appetite for both essential and lifestyle goods.
Retail channels have been evolving, the report added. Traditional trade outlets outperformed organised retail in growth, registering a 10% increase compared to 3.2% for modern outlets.
Meanwhile, e-commerce expanded significantly, now accounting for 30% of tech and durables sales and 11% of FMCG sales, up from 9% the previous year. The report said the growing shift towards online platforms mirrors broader digital adoption trends and consumer preference for convenience.
“The economic momentum we’re witnessing across the Middle East, particularly in the UAE, is a testament to the region’s strategic vision and adaptability,” said Andrey Dvoychenkov, General Manager of NielsenIQ APP.
“Consumers today are more empowered, informed, and value-driven than ever before. We’re seeing strong growth in both premium and value segments, and a rapid evolution in retail channels - especially online.”
Changing Shopping Habits
Beneath this resilience, however, lies a layer of consumer caution, as shown in data from Blue Yonder’s 2025 Global Consumer Sentiment on Grocery Inflation Survey.
The survey, which included respondents from the Middle East among other global regions, found that 85% of consumers globally are concerned about inflation’s impact on grocery prices with that figure sitting at 82% for the region.
Half of the survey respondents identified global tariffs as the primary driver of higher food prices, followed by rising raw material costs and labour expenses.
This growing sensitivity to cost is reflected in changing shopping habits. Almost two-thirds of surveyed consumers globally said they would buy fewer grocery items across categories to manage their budgets, while 42% reported shifting their shopping to discount and wholesale outlets.
In the UAE, similar trends are emerging: consumers are balancing premium aspirations with more value-driven decisions, seeking competitive alternatives while still embracing innovation and quality.
“With most consumers willing to adjust shopping habits in response to grocery inflation and mounting financial pressures, retailers, not just grocers, need to recognise the importance of building trust with shoppers through transparency, targeted promotions, and affordability-first strategies,” said Ben Wynkoop, senior director at Blue Yonder.
