Saudi consumers are shifting their shopping and spending decisions, says AlixPartners

04 February 2025 Consultancy-me.com

Saudi Arabia’s consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges, according to the 2025 Global Consumer Outlook by AlixPartners.

The report, based on responses from over 15,000 consumers across 9 countries, presents a nuanced forecast for global spending this year, with 31% of consumers surveyed planning to cut their spending in 2025. Just under half (47%) said that they will maintain their current spending levels, leaving only 19% in the position to actually spend more than they did last year.

Spending is trending downwards in the United States and Europe, however, consumers in the Middle East and China display more optimism.

As global consumers tighten their wallets, UAE and KSA consumers spend more

Despite global trends of reduced discretionary spending, Saudi consumers exhibit robust spending intentions said AlixPartners, a global management consulting firm, with a focus on value and cost efficiency as part of their purchasing strategies across essentials and discretionary categories. The same was true last year.

In 2025, KSA-based consumers are expected to maintain robust spending habits, driven by strategic priorities and a strong focus on essentials and experiences. While spending on essentials like groceries and clothing will remain consistent across all age groups and income levels, there are differences visible by generation and income background.

Low-income shoppers are focusing on necessities in response to inflation, while high-income groups are fuelling growth in discretionary categories, supported by their greater disposable income. Young consumers (18-34) are meanwhile increasingly shifting their spending to experiences and products, driving growth across these retail segments.

In terms of experiences, the AlixPartners report found one third of KSA consumers plan to spend more on eating out, with the same share of consumers to increase spending on entertainment outside of home. Both scores are well above the global average.

As global consumers tighten their wallets, UAE and KSA consumers spend more

More focus on value

However, at the same time, the authors highlight how cost pressures do play a role, suggesting that Saudi households are “navigating rising costs with a strategic approach”. That means: they are more and more adopting higher value-oriented choices to balance their spending priorities.

For instance, in groceries, there is a clear trend of consumers trading down to entry-price ranges and private labels, enabling discounters across retail segments to gain market share.

“Saudi Arabia’s retail landscape is undergoing profound transformation,” said Karl Nader, Partner & Managing Director at AlixPartners. “While consumer confidence remains evident in categories like dining out and entertainment, rising costs are reshaping shopping behaviors. Consumers are prioritizing value, exploring discount options, and balancing essentials with discretionary spending.”

For retailers, this shift means that they need to respond to an evolving landscape, in a timely and agile manner. “In a market defined by evolving preferences and increasing choice, established operators must adapt to the dual forces of economic pressure and changing consumer priorities. Success will come to those who prioritize value-driven offerings, leverage digital tools, and adapt swiftly to meet the changing demands of Saudi shoppers.”