The retail economy experienced a noteworthy growth of 13 per cent across various sectors, including leisure and entertainment (29 per cent), fashion (25 per cent), hypermarkets and supermarkets (11 per cent), and general retail (9 per cent) throughout the full year. The increase in consumer spending was largely driven by international visitors to the UAE, which doubled to 14 million in 2022, due to major events like the FIFA World Cup in neighboring Qatar.
The UAE’s annual GDP grew by 7.9 per cent in 2022, its highest since 2006, with growth observed across both oil and non-oil sectors. While the oil sector experienced a growth of 11.4 per cent due to the rise in the average oil price, the non-oil economy witnessed a robust growth of 6.6 per cent, attributed to the government’s efforts to attract investments and bolster the tourism sector.
Although consumers became more cautious in their spending during the last quarter of the year, opting for discounts and deals for essential items and reducing non-essential purchases such as electronics, the overall spending in the hypermarkets and supermarkets segment increased by 11 per cent. The extended 2.5-day weekend and consumer optimism also contributed to an 11.3 per cent increase in weekend retail sales compared to the previous year.
The e-commerce market in the UAE is the world’s fastest-growing, with sales forecast to reach $9.2bn by 2026. Spending in this area peaked in Q4 2022, with a growth of 20 per cent for the full year compared to 2021, and digital payment methods being the preferred option for three- quarters of consumers. Fintech solutions such as buy-now-pay-later (BNPL) gained popularity, with 45 per cent of consumers using BNPL financing in the past year. Meanwhile, the consolidated revenue of Majid Al Futtaim increased by 12 per cent to Dhs36.3bn in 2022.