The UAE is poised for a significant 13% net increase in consumer spending intentions for 2025, marking the highest growth globally. 

 

In contrast, global spending intentions show a net 12% decline, according to the 2025 Global Consumer Outlook published by AlixPartners, the global consulting firm. 

 

The report, based on responses from more than 15,000 consumers across nine countries, highlights anticipated spending increases in the UAE, Saudi Arabia, and China. However, these gains are outweighed by expected spending restraint in the US and Europe, where spending next year is projected to decline further from this year’s already-muted levels, signalling another challenging year for global consumer-facing industries.

 

The anticipated spending increase among UAE consumers is consistent across all income levels but is particularly pronounced among high-income shoppers. Among generational groups, shoppers under 45 (27%) are expected to lead the surge in spending across retail segments, driven by higher disposable income and the demands of starting and expanding households. In contrast, shoppers aged 45-64 are more likely to maintain their current spending habits (85%) or significantly reduce their expenditure (27%), as many in this age group transition to having financially independent dependents.

 

“This regional consumer optimism is driven by a more favourable macroeconomic outlook and a reduced perceived need to save,” said Hisham Abdul Khalek, Partner & Managing Director. “This confidence translates into increased anticipated spending across all sectors, particularly in groceries and clothing, driven not only by inflationary pressures but also by premium purchases and a general willingness to spend optimistically.”

 

AlixPartners’s report, titled Spending Disrupted, identified several key trends across spending categories and income levels, including:

 

• Grocery registered the highest spending increase (47%), driven by a combination of rising disposable incomes, price inflation, and premiumization among high-income shoppers.

• Clothing (41%) followed as the second-highest segment for increased spending, fueled by growing disposable incomes and the expansion of premium brand offerings.

• Despite rising grocery spending, consumers are seeking savings through better planning and switching to more affordable retailers, relying less on promotions compared to previous years.

• In non-grocery categories, consumers are saving by planning purchases more strategically and avoiding certain categories altogether.

• Dining out remains a polarising category: while a third of UAE consumers plan to spend more on eating out, globally, 34% intend to spend less, with only 19% planning to increase dining expenditures.

• Entertainment outside the home is gaining traction, with 41% of UAE consumers intending to spend more, followed by 33% in Saudi Arabia and 28% in China.

• If consumers had more money to spend in 2025, priorities of UAE consumers would be travel/ holidays (26%) followed by save and not spend more (20%) and groceries (18%)

 

“Despite the region's overall growth narrative, consumption bifurcation remains prevalent. As discount retailers increasingly penetrate the market, some consumers are trading down to more affordable retailers and value brands, particularly in groceries. There are profitability challenges for some companies in the region, coupled with reports of reduced investments and rationalised operations. While this has not yet affected consumer sentiment, it is something that may need to be monitored as the market evolves in the coming year,” Khalek concluded. – TradeArabia News Service