BrazilAs global consumers tighten their wallets, UAE and KSA consumers spend more
Consumers worldwide are expected to tighten their wallets in 2025, as they grapple with challenges such as reduced disposable income and continued inflation, but in the UAE, consumers are set to defy that trend, according to a report from AlixPartners.
Having canvassed the views of more than 15,000 consumers across nine countries, the AlixPartners report sheds light on the forecasted spending patterns of consumers from different corners of the globe. The Middle East is represented by consumers based in the UAE and Saudi Arabia.
Globally, a cautious and prudent outlook prevails, with 31% of consumers planning further spending cuts this year, although a considerable 47% plan to maintain their current spending levels. Just 19% say they will spend more. Spending is trending downwards in the United States and Europe, however, consumers in the Middle East and China display more optimism.
The UAE is poised for a significant 13% net increase in consumer spending intentions for 2025, marking the highest growth globally. The anticipated spending increase among UAE consumers is consistent across all income levels but is particularly pronounced among high-income shoppers. In Saudi Arabia, a similar picture is visible, far ahead of the global average, yet slightly less pronounced compared to the UAE.
“The regional consumer optimism is driven by a more favorable macroeconomic outlook and a reduced perceived need to save,” said Hisham Abdul Khalek, Partner & Managing Director at AlixPartners. “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.”
The report further found that if consumers had more money to spend in 2025, priorities of UAE consumers would be travel/holidays (26%) followed by saving (20%) and groceries (18%).
Grocery is expected to receive the highest spending increase in wallets, but in non-grocery categories, consumers are saving by planning purchases more strategically and avoiding certain categories altogether.
Dining out remains a polarizing category in the region: while a third of UAE consumers plan to spend more on eating out, globally, 34% intend to spend less, with only 19% planning to increase dining expenditures. In the UAE, entertainment outside the home is notably gaining traction, with 41% of UAE consumers intending to spend more, followed by 33% in Saudi Arabia.
“Despite the region's overall growth narrative, consumption bifurcation remains prevalent,” said Khalek. “As discount retailers increasingly penetrate the market, some consumers are trading down to more affordable retailers and value brands, particularly in groceries.”
