UAE consumers remain willing to open their wallets despite persistent cost pressures, but they are becoming far more selective about where they spend their money, according to research by NielsenIQ (NIQ), highlighting a growing divide between premium and value-driven shopping habits.
The strongest evidence of that shift comes from consumer priorities. NIQ found that 72 per cent of UAE shoppers are willing to pay more for quality products, up four percentage points from a year earlier, while 63 per cent are prepared to spend extra on products and services that save them time, a figure that has risen by almost 10 percentage points year on year.
The findings suggest that consumers are not simply cutting back on spending amid higher prices. Instead, they are making deliberate decisions about where to trade up and where to seek value, creating a more polarised retail environment.
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“The central question today is no longer whether consumers are willing to spend; they are spending,” NIQ said in its latest consumer analysis. “The question is whether a product can clearly justify its place in the basket.”
That trend is playing out against a backdrop of continued economic strength in the UAE. According to NIQ, the country is experiencing consumption-led growth supported by strong activity in tourism, construction and financial services.
The polarisation is particularly visible in the FMCG sector. NIQ said the UAE market is increasingly fragmented between affordable and premium brands, with consumers moving away from the traditional middle ground. The company noted that while Saudi Arabia’s FMCG growth remains concentrated in mainstream products, the UAE is seeing expansion at both ends of the market, helped by new brand launches and premium offerings.
A separate NIQ analysis of consumer behaviour across Africa and the Middle East found FMCG value sales rising 10.4 per cent, compared with volume growth of 2.4 per cent, underlining how spending growth is increasingly driven by consumers’ willingness to pay more for products they perceive as offering genuine value.
The shift is also reshaping brand loyalty. While UAE shoppers remain highly responsive to promotions, NIQ found they are slightly more loyal to preferred brands than Saudi consumers, suggesting that reputation and trust continue to influence purchasing decisions even when shoppers are seeking savings.
Convenience is emerging as another powerful spending driver. NIQ reported double-digit growth in e-commerce across the UAE, reflecting rising demand for channels that save consumers time and effort.
The changing mindset is also benefiting private-label products. Globally, 58 per cent of consumers said they do not care whether a product is a national brand or a private label, while 69 per cent believe private-label products offer good value for money.
“This is one of the most significant shifts happening in consumer goods today,” said Ramon Melgarejo, President of Consumer Intelligence Initiatives and E-Commerce at NIQ. “Consumers are no longer evaluating products primarily based on who makes them. They are evaluating whether a product delivers the right mix of quality, value, convenience, and relevance.”
For retailers and consumer brands in the UAE, the message is clear: shoppers are still spending, but success increasingly depends on convincing them that a product is either worth paying more for or represents outstanding value. The middle ground is becoming harder to defend.
Source: Khaleej Times