This year's Christmas celebrations are likely to be dampened by the dreary economic climate, with consumer spending on gifts expected to decline not only in the UAE but in all other parts of the world.
Studies have shown that consumers are approaching the holidays very cautiously, holding off on big ticket items and focusing on things that clearly communicate value.
"We believe that Christmas spending in Dubai will be less this year than in the past. There is no question that consumer confidence throughout the expatriate population in the UAE continues to be adversely affected by macro-economic issues such as personal debt, job security, declining property value, and loss of wealth," says Colin Beaton of Limelight Creative Services, a local retail strategy and design consultancy.
Challenging times
"In addition, many expatriates have had their personal wealth and income decline through no fault of their own due to sharp movement in foreign exchange rates. What was once reasonable is now expensive. The combination of these factors will certainly lead to continued cautious spending by expatriates and, as a result, continued challenging times for Dubai's retailers," Beaton adds.
In the US alone, per household spending on gifts is expected to drop from $418 (Dh1,535) last year to $390 this year, according to The Conference Board.
In a separate survey by the National Retail Federation, 84.2 per cent of Americans are adjusting their holiday plans by spending less. A lot will be shopping for sales more often (55 per cent), using more coupons (41.7 per cent) and recycling last year's decorations (34 per cent).
Many are expected to make changes in gift-giving by purchasing more practical gifts (36 per cent) and buying a joint gift for kids or parents (17.3 per cent).
Less upbeat
Retailers in Dubai confirm that the gift-giving mood in the UAE this year is also less upbeat compared to last year, owing to the current financial climate.
Kajsa Dokakis, managing director of Quick Dubai, which offers an online gift delivery service, says they have noticed a 20 per cent increase in orders since last year, but this is only due to their expanding market share.
"We do however see a decrease in spend on average order. Therefore we have introduced some categories [that offer gifts for less and gifts under Dh100] and also tried to keep prices the same this year as last Christmas," Dokakis says.
Amy Parker, partner and media relations for Kentessa, another online gift retailer, says their sales remain robust, but this is largely due to increased efficiency in their core business strategy and targeted market intelligence.
"The pace of sales is not to our expectations, but it's still increasing and satisfying," Parker notes.
