Deira City Centre during the three-day super sale in Dubai. FMCG firms have been urged to be wary, with consumers expected to ditch brand loyalty in the search for bargains. Image Credit: Ahmed Ramzan/ Gulf News


UAE consumers sure packed in a lot of confidence … in the last three months of 2017 and ahead of the VAT (value-added tax) regime. In fact, it was enough to propel them into fifth position worldwide, in the Nielsen “Global Consumer Confidence Survey”.

Only consumers in the Philippines, India, Indonesia and the US expressed greater confidence during that particular period.

Respondents in the UAE were generally optimistic about their personal finances, with 65 per cent believing they would be good or excellent in the next 12 months, an increase of one percentage point from Q3-17. More than half were “confident about immediate-spending intentions (55 per cent), an increase of three percentage points from the previous quarter, according to a statement issued by Nielsen on Monday.

“The perception of job prospects however, dipped slightly with the share of respondents who think job prospects will be good or excellent over the next 12 months declined from 66 per cent in the third quarter of 2017 to 64 per cent in the fourth quarter of the year,” the report added.

It would be interesting to find out how consumer confidence fared in the first five months of 2018, more so in the wake of the VAT roll-out and poor sales volumes recorded across the retail sector during the period.

“The current taxation environment, which is entirely new to the majority of UAE consumers, has led to added levels of anxiety around price changes,” said Arslan Ashraf, Managing Director, Nielsen Arabian Peninsula and Pakistan. “FMCG [fast moving consumer goods] manufacturers need to carefully monitor consumer actions, as consumers can become less brand loyal as they search for more bargains.

“There is scope for portfolio optimisation in order to have the right product price mix to win in the marketplace.”

In the Nielsen rankings, the UAE’s consumer confidence recorded an index of 118 in the fourth quarter last year, which is a six point increase from the previous quarter and a 10-point increase from the same period in 2016.

The percentage of UAE respondents who cited the economy as a leading concern increased one percentage point, but, interestingly, concerns over job security actually declined in the fourth quarter of 2017 by six percentage points from the previous quarter.

Going forward, “the economy is showing early signs of renewal as growth marginally picks up, with firming oil prices, an increase in infrastructure development and easing fiscal adjustment due to new revenue streams,” Ashraf said. “This is reflected in the positive momentum of consumer confidence level.”