Dubai: Consumers in the UAE are becoming more cost-conscious and less brand-loyal, according to a recently released survey.
Shoppers in Saudi Arabia and the UAE felt that they were forced, over the last two years, to make adjustments to their spending habits, and now feel more confident about spending disposable income, in order to regain some of their lost purchasing power, consultant McKinsey said in a report released last week.
In Saudi Arabia, 34 per cent of consumers are looking to buy their preferred brands at any price point, as compared to 42 per cent in April 2017. In the UAE, this number was 34 per cent as compared to 41 per cent in 2017.
“Interestingly, consumers in UAE and KSA responded similarly to most questions that were put to them and despite fluctuating financial sentiment, they believe they are saving and delaying purchases less than in Spring 2017,” said Gemma D’Auria, leader of the retail practice in McKinsey’s Middle East office.
McKinsey’s 2018 Middle East Sentiment Survey classifies shoppers into five categories based on their behaviour: Savvy cost-cutters, thrifty brand loyalists, selective splurgers, trade-down converts and multichannel shoppers.
Respondents in Saudi Arabia also said that they were using loyalty cards and coupons much more heavily in 2017, compared to 2015.
Questioned twice last year, once in April and again in October, those surveyed reported a marginal alleviation of some cost-cutting measures the second time they answered the survey, with concerns over spending appearing to be more pronounced in April.
In general, McKinsey says, Saudi Arabian consumers believe that they have cut spending across all types of retail, including convenience stores, discounted stores, and hypermarkets.
The latter saw the smallest decline, at only 2 per cent, while convenience stores saw a reported reduction of 45 per cent over the previous 12 months.
According to the report, retailers investing in analytics-driven decision-making are significantly outperforming their peers.