UAE consumers drive premium spending as Saudi Arabia focuses on value

Consumer spending patterns in the Middle East are evolving rapidly, but the UAE and Saudi Arabia are charting distinctly different paths, according to NielsenIQ’s State of the Nation report for Q3 2025.

In the UAE, shoppers are trading up, fueling strong growth in premium food categories and maintaining steady demand for technology products. FMCG revenues surged by 7.7 per cent over the past year, while Tech & Durables (T&D) posted a healthy 6.9 per cent increase. This trend reflects a willingness among UAE consumers to invest in quality and variety, particularly in their grocery baskets.

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Saudi Arabia, meanwhile, tells a different story. While overall spending is rising, the focus in FMCG is on value-driven choices, with revenues growing 1.7 per cent year-on-year. In contrast, technology is where Saudi consumers are splurging — technology  expanded by 4.5 per cent, led by premium categories such as smartphones, TVs, and tablets. This divergence underscores a key insight: Saudi shoppers are pragmatic about everyday essentials but aspirational when it comes to tech.

Category dynamics reinforce these trends. In Saudi Arabia, Pet Care (+13 per cent), Snacking (+6 per cent), and Beverages (+3 per cent) are driving grocery growth, while high-end devices dominate tech purchases. In the UAE, both value and premium FMCG segments grew by more than 20 per cent, and T&D saw gains across the board — premium (+7.5 per cent) and value (+3.6 per cent) outperforming mainstream offerings (+6.0 per cent). This dual-market growth in the UAE presents opportunities for suppliers to cater to both ends of the spending spectrum.

Channel preferences are shifting too. Modern Trade remains dominant, accounting for about 70 per cent of FMCG sales regionally, but e-commerce is gaining traction. Online now contributes 11.9 per cent of FMCG sales in the UAE and 5.6 per cent in Saudi Arabia, while traditional trade still plays a significant role — 18 per cent in the UAE and 23 per cent in Saudi Arabia. For tech products, the digital channel is even stronger, representing nearly one-third of T\&D revenues, signaling that consumers are comfortable making big-ticket purchases online even if fresh groceries remain a physical-store preference.

Andrey Dvoychenkov, General Manager at NielsenIQ APP, sums it up: “Saudi consumers prioritise value in groceries but will splurge on premium technology, while UAE shoppers show strong growth at both ends of the spectrum. This creates opportunities for suppliers to tailor offerings for entry-level and premium segments.”

For brands, the message is clear: adapt strategies to local behaviors. In Saudi Arabia, amplify premium tech portfolios during seasonal peaks. In the UAE, optimise pricing architecture for FMCG while maintaining a robust omni-channel presence across both markets. As consumer baskets expand, understanding these nuances will be critical for capturing growth in the region’s most dynamic economies. 

Somshankar Bandyopadhyay

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somshankar@khaleejtimes.com

Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.