According to a new analysis from Majid Al Futtaim, retailers in the UAE recorded a 4 percent quarterly gain in consumer spending in the second quarter of this year, indicating that the country’s retail industry could approach pre-pandemic levels before the end of 2020.
Consumer spending increased by 4 percent in the first quarter of this year, compared to 3 percent in the same period last year, according to the mall’s operator.
“We continue to see positive trends across the UAE retail economy, and in some sectors significant progress in returning to pre-pandemic levels. We see this cautious optimism strongly driven by the robust vaccination measures, looking ahead, we continue to see an acceleration in consumer expectations towards omnichannel experiences, as digital and technology solutions become further integrated into everyday life. We also look forward to seeing further recovery in tourism-related sectors, bolstered by the opening of Expo 2020 later this year.”
The retail industry, which is heavily reliant on tourism and is one of the UAE’s main drivers, experienced a major setback last year as a result of the global border closures. Consumer buying patterns have also played a significant role in the drop in footfall at retail stores across the country.
However, following massive vaccinations, shoppers are now “demonstrating increased comfort levels in public spaces”, with the majority 64 percent saying they now feel comfortable visiting a shopping mall.
Total footfall grew by 11 percent in the second quarter of 2021 at Majid Al Futtaim malls compared to the first quarter. When compared to the same period last year, consumer spending in non-mall retail destinations increased by 3 percent in the second quarter. Food and beverage sales went up 41 percent, while home furnishings posted an increase of 28 percent.
Furthermore nearly half of the shoppers polled in the retailer’s Happiness Lab survey indicated they felt comfortable taking their children to malls.
According to the research, e-commerce sales continued to be a bright spot in the Emirate’s retail industry, gaining 17 percent in the first half of this year compared to the same period last year. During the same period, online sales accounted for 9 percent of total consumer spending in the UAE.