File photo used for illustrative purposes
File photo used for illustrative purposes

UAE: Nearly half of consumers expect Covid-19 impact to last another year

Dubai - 73% of consumers have admittedly changed their shopping habits to adapt to the 'new normal', according to the survey.

By Team KT

Published: Sun 27 Jun 2021, 3:26 PM

Last updated: Sun 27 Jun 2021, 3:27 PM

As a majority of UAE consumers changed their shopping habits to adapt to the ‘new normal’, nearly half — or 46 per cent — are expecting the effects of the pandemic to last at least another year, a new survey has found.

Looking into how shopping habits have changed since the onset of the pandemic, the study — commissioned by global consulting firm Kearney — highlighted how residents’ spending priorities had shifted and how preference for online shopping continued to grow.

Increased vaccinations (47 per cent) and continued protective and social distancing measures (28 per cent) will be key to rebuilding UAE consumers’ confidence in visiting stores, restaurants and supermarkets, according to the survey.

“The pandemic has fundamentally changed the way consumers view health and safety measures and efforts...Spending is being driven by the easing of restrictions, higher awareness of health and wellbeing, and expectations to return to the office,” said Debashish Mukherjee, partner and head of consumer industries and retail practice at Kearney Middle East.

The survey has shown a sustained increase in expenditure on essential items, while spending on non-essentials (clothes, bags and accessories) continues to decline.

Twenty-three per cent of those polled have reduced their expenditure on essential items by up to 50 per cent compared to pre-pandemic times. However, over a third (34 per cent) have increased spending by over 25 per cent. Conversely, spending on non-essentials has decreased by 41 per cent, with only 23 per cent of respondents increasing spend in this area.

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

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

As spending habits evolve, e-commerce continues to penetrate all categories. The survey highlighted that UAE consumers are now more comfortable purchasing essentials online compared to last year.

When asked about the reasons behind this, convenience (58 per cent) was the main driver, followed by Covid-19 prevention measures (25 per cent), an assortment of products (13 per cent), and finally, price (4 per cent).

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

While vaccinations and protective measures were cited as the key drivers of consumer confidence in visiting public places, a contactless in-store experience (16 per cent) and alternative shopping options (9 per cent) — such as click and collect and curb-side pick-ups — were highlighted as other methods of shopping that would encourage people to step out and buy their needs.

Forty per cent of respondents highlighted an offline shopping preference for essential items, and 30 per cent for non-essential items, particularly for 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. 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 it’s essential for stakeholders, mall property owners and retailers to monitor the evolving face of retail to ensure they stay relevant,” said Mukherjee.

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