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UAE: Spending habits change as consumers stay cautious amid Covid pandemic

Dubai - Study shows that 73 per cent of consumers have admittedly changed their shopping habits to adapt to new normal.

The spending habits of buyers in the UAE will continue to evolve, although most consumers will stay cautious, according to the finding of a study.

A study commissioned by Kearney shows that 46 per cent of consumers expect the effects of the pandemic to last at least another year. “Increased vaccinations (47 per cent) and continued protective and social distancing measures (28 per cent) will be key to rebuilding UAE consumers’ confidence to visit public places (stores, restaurants and supermarkets) moving forward,” said the study.

The study also highlights that expenditure on essential items (which constitutes of food and beverage (F&B) as well as non-F&B items) has shown a sustained increase, while spending on non-essentials (clothes, bags and accessories) continues to decline.

According to the study, 73 per cent of consumers have admittedly changed their shopping habits to adapt to the “new normal”, with a larger portion of women reporting changed habits (81 per cent) than men (67 per cent). Those aged between 30-45 recorded the highest change (80 per cent) followed by those under 30 years of age (73 per cent).

During Covid, consumer habits also underwent some changes with 23 of the buyers reducing expenditure on essential items by up to 50 per cent compared to pre-pandemic. However, over a third (34 per cent) of respondents have increased spending by over 25 per cent. “Conversely, spending on non-essentials has decreased by 41 per cent, with only 23 per cent of respondents increasing spend in this area.”

“The pandemic has fundamentally changed the way consumers view health and safety measures and efforts. As residents adopt to the new normal, hygiene and hygiene transparency have become vital. Spending is being driven by the easing of restrictions, higher awareness of health and wellbeing, and expectations to return to the office,” said Debashish Mukherjee, partner & head, Consumer Industries and Retail Practice at Kearney Middle East.

“As spending habits evolve, e-commerce continues to penetrate all categories. The survey highlights that UAE consumers are now more comfortable purchasing essentials online compared to last year. Convenience (58 per cent) was the main driver, followed by Covid-19 prevention measures (25 per cent), assortment of products (13 per cent) and finally, price (4.0 per cent),” said the study report.

In the category of the essential item, 16 per cent of respondents have upgraded to higher-priced, better quality items, with the highest increase is shown for fruits and vegetables (30 per cent), as well as meats and dairy (22 per cent)

The study shows that a fifth (21 per cent) of respondents have highlighted that they expect to spend more on non-essentials in the coming months, particularly on activewear (31 per cent), workwear (30 per cent), casual wear (20 per cent), footwear (20 per cent), evening wear (17 per cent), and bags and accessories (80 per cent).

Covid-19 prevention measures ranked third for online shopping for non-essential items (21 per cent), preceded by convenience (49 per cent) and price (25 per cent), with an assortment of products (5.0 per cent) ranking last.

While increased vaccinations and continued protective and social distancing measures were the key drivers of restoring consumer confidence in visiting public places, a contactless in-store experience (16 per cent) and alternative shopping options (9.0 per cent) such as click & collect, and curbside pick-ups were highlighted as other methods of shopping that would increase confidence.

“For UAE consumers, convenience is driving online purchases with Covid-19 concerns becoming a secondary factor, indicating the sustenance of the online shift. However, the physical store still plays a strong role across all categories which require the customer to touch, feel and try the product,” said Mukherjee.

issacjohn@khaleejtimes.com