As spending habits continue to evolve, UAE consumers are staying cautious, with 46% expecting the effects of the pandemic to last at least another year, according to a study commissioned by global consultancy Kearney.

Increased vaccinations (47%) and continued protective and social distancing measures (28%) will be key to rebuilding UAE consumers’ confidence to visit public places (stores, restaurants and supermarkets) moving forward, said the study, the third in a series of surveys exploring consumer shopping habits since the onset of the pandemic.

It also highlights that expenditure on essential items (which constitutes of food and beverage (F&B) as well as non-F&B items) has shown a sustained increase, while spending on non-essentials (clothes, bags and accessories) continues to decline.

Seventy-three per cent of consumers have admittedly changed their shopping habits to adapt to the “new normal”, with a larger portion of women reporting changed habits (81%) than men (67%). Those aged between 30-45 recorded the highest change (80%) followed by those under 30 years of age (73%).

When looking more closely into how habits have changed, 23% have reduced expenditure on essential items by up to 50% compared to pre-pandemic, however, over a third (34%) of respondents have increased spending by over 25%. Conversely, spending on non-essentials has decreased by 41%, with only 23% of respondents increasing spend in this area.

Within the essential items category, 16% of respondents have upgraded to higher priced, better quality items, with the highest increase shown for fruits and vegetables (30%), as well as meats and dairy (22%)

A fifth (21%) of respondents have highlighted that they expect to spend more on non-essentials in the coming months, particularly on activewear (31%), workwear (30%), casual wear (20%), footwear (20%), evening wear (17%), and bags and accessories (8%).

“The pandemic has fundamentally changed the way consumers view health and safety measures and efforts. As residents adapt to the new normal, hygiene and hygiene transparency have become vital. Spending is being driven by the easing of restrictions, higher awareness of health and wellbeing, and expectations to return to the office,” commented Debashish Mukherjee, Partner & Head, Consumer Industries and Retail Practice at Kearney Middle East

As spending habits evolve, e-commerce continues to penetrate all categories. The survey highlights that UAE consumers are now more comfortable purchasing essentials online compared to last year. When questioned about the motivations behind this, convenience (58%) was the main driver, followed by Covid-19 prevention measures (25%), assortment of products (13%) and finally, price (4%).

Interestingly, Covid-19 prevention measures ranked third for online shopping for non-essential items (21%), preceded by convenience (49%) and price (25%), with assortment of products (5%) ranking last.

While increased vaccinations and continued protective and social distancing measures were the key drivers of restoring consumer confidence in visiting public places, a contactless in-store experience (16%) and alternative shopping options (9%) such as click &collect, and curb-side pick-ups were highlighted as other methods of shopping that would increase confidence.

Saying this, 40% respondents highlighted an offline-shopping preference for essential items, and 30% for non-essential items, particularly for those products that require inspection for quality, freshness and fit.

“For UAE consumers, convenience is driving online purchases with Covid-19 concerns becoming a secondary factor, indicating the sustenance of the online shift. However, the physical store still plays a strong role across all categories which require the customer to touch, feel and try the product,” Mukherjee said.

“Retailers will need to adopt a differentiated strategy to make consumers feel safe in stores; UAE consumers are heavily indexed towards vaccinations and protective measures; however, this will vary across markets and its essential for stakeholders, mall property owners and retailers to monitor the evolving face of retail to ensure they stay relevant,” he concluded. – TradeArabia News Service