UAE consumer spending up in 2023, retail report shows
The UAE’s retail sector boomed in 2023, defying global trends by growing by 13%, according the latest ‘State of the UAE Retail Economy’ report from regional retail giant Majid Al Futtaim.
The report, which highlights key economic data, trends and insights into consumers’ behaviour patterns, found that the UAE’s economy saw 3% GDP growth last year, driven by strong performances in non-oil sectors.
Inflation stayed below the global average (at 6.9%) and was lower than the Middle East average of 13.9%.
Majid Al Futtaim CEO Ahmed Galal Ismail said: “Over the past 12 months, its proven resilience to external pressures, coupled with progressive policy-making and an investor-friendly business environment, has seen the UAE further strengthen its position as a lighthouse for the MENA region.
“The nation’s ability to act as a magnet for global talent, investors and entrepreneurs, has translated to a record number of visitors, far surpassing pre-Covid levels, fuelling consumer confidence and further contributing to its thriving retail sector.”
Among the retail sectors that saw the strongest growth in 2023 were fashion (up 31% on 2022), general retail (16%), and leisure and entertainment (15%).
E-commerce in the UAE also saw strong growth, up 15%, with around 70% of transactions made via mobile phones.
Majid Al Futtaim’s point of sales (POS) data also showed a 15% growth in e-commerce consumer spending in the UAE retail economy in 2023. This was driven by growth in consumer spending in hypermarkets and supermarkets (19%), and retail general categories such as food and beverages (57%), and hotels (10%).
The UAE’s travel and tourism sectors experienced a significant rebound in 2023, surpassing pre-pandemic levels.
Ban on single-use plastics to come into force
Dubai Municipality has unveiled plans for a comprehensive ban on various types of single-use products, to be implemented in three distinct phases.
The initiative forms part of the emirate’s efforts to tackle environmental concerns and promote sustainability.
The primary aim is to mitigate plastic waste and instigate a shift towards recycling, safeguarding the environment and fostering a culture of sustainability within both businesses and the community.
Dubai Municipality, under its #DubaiMoreSustainable campaign, initially launched an awareness guide for the initiative during COP28.
The ban will roll out in three stages:
- June 1, 2024: A total prohibition on single-use plastic bags, alongside the discontinuation of the existing levy of 25 fils (£0.05) on such bags.
- January 1, 2025: Bans will extend to include plastic stirrers, Styrofoam food containers, plastic table covers, plastic cotton swabs, plastic straws, and single-use Styrofoam cups.
- January 1, 2026: The final phase will see the prohibition of single-use plastic cups and lids, single-use plastic cutlery, plastic food containers, and plastic plates.
With these measures, Dubai Municipality aims to encourage responsible consumer behavior and prompt businesses to adopt eco-friendly alternatives.
Starting from June 1, 2024, the comprehensive ban on single-use bags will include all types of bags that are 57 micrometres thick and less, including biodegradable bags. These require their own recycling process since they do not totally decompose, leaving micoplastics behind that could potentially enter the human food-chain.
Bread bags, bin liners, wrapping bags for vegetables, meats, fish and chicken are among the items that are exempt from the policy.
The fee is mandatory in all stores that use single-use bags for transporting goods and the 25 fils cost is applicable until June 2024.
Fines of Dhs200 will be imposed for non-compliance with the policy of regulating the use of single-use products in Dubai. The penalty doubles if the offence is repeated within one year from the date of the previous offence, not exceeding Dhs2000.
