UAE consumers maintain robust spending, driven by FMCG and tech sectors

UAE consumers continued to display resilient spending patterns in the third quarter of 2024, with total investments in Fast-Moving Consumer Goods (FMCG), Technology, and Durable Goods reaching USD 3.7 billion.

This represents a 4.8% year-on-year increase, underlining the country's robust retail market and adaptability to changing consumer demands, according to the NielsenIQ Retail Spend Barometer powered by GfK intelligence.

FMCG leads growth

The FMCG sector emerged as the key growth driver, recording USD 2.1 billion in sales, a 6.4% increase compared to Q3 2023. This reflects a significant boost from the previous year, where growth in the same quarter stood at 3.2%.

Although the sector experienced a dip in Q1 2024 compared to Q1 2023, the consistent upward trajectory in subsequent quarters highlights its resilience.

Quarterly trends in FMCG spending reveal seasonal adjustments and evolving consumer preferences. Convenience retail, driven by the expansion of new communities across the UAE, has gained prominence.

Consumers increasingly opt for smaller, more frequent shopping trips, favoring healthier and sustainable products.

Additionally, the rapid adoption of online grocery platforms, especially among younger demographics and busy professionals, has further strengthened the sector’s performance.

Technology and durables: a steady performer

The Technology and Durables sector contributed USD 1.5 billion in Q3 2024, reflecting a 2.5% year-on-year growth. While this represents a slowdown from the 7.7% growth observed in Q3 2023, the sector remained robust, bolstered by Back-to-School campaigns and sustained demand for consumer electronics.

Quarterly sales trends show a strong start in Q1 2024, with USD 1.65 billion in sales, followed by a gradual stabilization in Q2 and Q3.

The launch of flagship products, such as the Samsung Galaxy S24, fueled early-year growth, while seasonal promotions offset moderate declines in subsequent quarters.

Digital transformation shapes retail behavior

The UAE’s retail landscape is undergoing a profound transformation, driven by the rise of QuickCommerce and online shopping. These platforms have reshaped traditional shopping patterns by offering seamless digital experiences and convenient home delivery services.

The success of Back-to-School promotions and targeted campaigns has further contributed to the sector’s positive performance in Q3 2024.

David Cantatore, Retail Lead for NIQ Middle East, highlighted the significance of digital evolution in the retail sector:

“In Q3 2024, we’ve witnessed sustained growth in UAE’s retail landscape, with strong consumer spending driven by targeted promotions and increased demand in both FMCG and tech sectors. The growth of new communities is fueling convenience retail, while online grocery shopping is reshaping the landscape, especially among younger and busy professionals. This digital evolution demonstrates the market’s appetite to adapt and thrive in response to changing consumer preferences.”

A look ahead

The UAE’s retail market continues to exhibit resilience and adaptability, reflecting strong consumer confidence and a dynamic economic environment. Non-traditional retail channels, including QuickCommerce platforms and convenience stores, are expected to play an increasingly significant role in driving growth.

The country’s commitment to innovation and digital transformation ensures the retail sector is well-positioned for sustained growth.

As Cantatore notes, the evolving shopping behaviors and technological advancements underscore the UAE’s role as a global leader in retail innovation.

From essential FMCG products to cutting-edge technology, UAE consumers are embracing modern shopping solutions, reflecting their confidence in the country’s robust and future-ready economy. The sustained growth in Q3 2024 is a testament to the UAE’s ability to adapt and thrive amidst changing market dynamics.