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Key findings from the report embrace:
- The UAE recorded its strongest GDP progress since 2006, actualising to 7.9%
- Will increase in shopper spending have been famous within the retail (13%) and non-retail economic system (29%)
- E-commerce gross sales are on a powerful upward trajectory, greater than doubling to USD 6 billion in 2022 from USD 2.6 billion in 2019
- On-line grocery store and hypermarket spending grew by 40% in 2022, whereas offline progress was at 7%
- Property gross sales have been at a record-breaking 12-year excessive by way of quantity and worth, with transactions leaping by 60% as compared with 2021
Majid Al Futtaim, the main shopping center, communities, retail and leisure pioneer throughout the Center East, Africa and Asia, at the moment launched its ‘State of the UAE Retail Financial system’ This fall report, which revealed that total shopper spending was up 19% in 2022 in comparison with the earlier yr.
There was a notable 13% progress in spending throughout the retail economic system for the total yr together with, leisure and leisure (29%), trend (25%), hypermarkets and supermarkets (11%) and common retail (9%). This enhance was pushed by the rise in worldwide guests to the UAE, which greater than doubled to 14 million in 2022, bolstered by main occasions together with FIFA World Cup in neighbouring Qatar.
Ahmed Galal Ismail, Chief Government Officer at Majid Al Futtaim – Holding, mentioned: “The UAE’s unwavering skill to triumph in instances of financial adversity has led to the best annual GDP progress since 2006. Majid Al Futtaim’s newest State of the UAE Financial system Report highlights the energy and resilience that underpins the nation’s place as a beacon of social and financial prosperity for the MENA area. Pushed by its leaders’ clear imaginative and prescient, progressive insurance policies and a steadfast dedication to the long-term success of the Nation’s individuals, the United Arab Emirates is well-placed to proceed to ship sustained progress for the long-term.”
Macroeconomic Developments
The UAE posted its strongest annual GDP progress since 2006, leaping to 7.9%, from 3.9% in 2021. The drivers of this enhance have been broad-based, throughout oil and non-oil sectors. As anticipated, oil remained the principle element on account of an increase of round 38% within the common oil worth, inflicting the sector to rebound to 11.4% progress, after contracting by 0.7% the earlier yr.
The non-oil economic system demonstrated strong progress at 6.6%, buoyed by authorities efforts to draw investments and enhance the nation’s tourism sector.
Client Behaviour Developments
The ultimate quarter of 2022 noticed individuals changing into extra cautious with their spend, choosing reductions and offers for important gadgets, and reducing again on non-essential’s similar to electronics.
The common spend per transaction in hypermarkets and supermarkets was down 3% throughout the yr, nevertheless total spending within the section was up 11% on the yr prior, displaying motion in the direction of smaller basket worth and extra frequent transaction.
The prolonged 2.5-day weekend additionally influenced the rise in shopper spend, with weekend retail gross sales growing by 11.3% versus the earlier yr. This translated to extra spending of roughly AED 5.5 billion in response to Majid Al Futtaim Level of Gross sales (POS) information.
Client Sentiment
Inflation was a actuality in 2022 ending the yr at 5.2%, nevertheless, it was nonetheless considerably lower than elsewhere on this planet. Client optimism remained excessive although, regardless of inflation. In Majid Al Futtaim’s Happiness Lab survey, roughly 90% of respondents seen the UAE’s present financial state of affairs positively. The Majid Al Futtaim POS information indicated that this optimism is evidenced by a peak in absolute shopper spending within the fourth quarter of 2022, which accounted for 29% of all retail financial exercise throughout the yr.
Burgeoning Digital Financial system
Evaluation means that the UAE has the world’s fastest-growing e-commerce market, with gross sales forecast to succeed in USD 9.2 billion by 2026. Spending on this space peaked in This fall 2022 and grew by 20% for the total yr in comparison with 2021, with three-quarters of customers saying that digital cost strategies are the popular possibility, in response to Majid Al Futtaim POS information.
Fintech options similar to buy-now-pay-later (BNPL) gained tempo, with 45% of customers utilizing BNPL financing previously yr, up from 21% a yr earlier.
A majority of on-line spending by residents was within the hypermarket and grocery store sector, which witnessed spending progress of 40% throughout the yr.
UAE Property Market
The true property sector witnessed a record-breaking yr, with property gross sales at a 12-year excessive by way of quantity and worth. Transactions jumped 60% as compared with 2021, with gross sales values climbing by 76% to AED 265 billion in 2022. The market hit its peak in This fall at 27,000 transactions, up from 16,000 a yr earlier.
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