UAE Consumer Spending To Rise Highest In The World

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 U.S. 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 per cent) 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 per cent) or significantly reduce their expenditure (27 per cent), as many in this age group transition to having financially independent dependents.

“This regional consumer optimism is driven by a more favorable macroeconomic outlook and a reduced perceived need to save,” said Hisham Abdul Khalek, partner and 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.”

Grocery registered the highest spending increase (47 per cent), driven by a combination of rising disposable incomes, price inflation, and premiumisation among high-income shoppers. Clothing (41 per cent) 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 polarizing category: while a third of UAE consumers plan to spend more on eating out, globally, 34 per cent intend to spend less, with only 19 per cent planning to increase dining expenditures.

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

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

“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 rationalized 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,” Abdul Khalek said.