Global economic uncertainties haven’t had much of an impact on the region’s top spenders – and now there is data to back that fact.
New research shows that the region’s consumer went full speed ahead with their spending on luxury goods in 2015 despite global economic uncertainties and a drop in oil price,
A survey commissioned by American Express Middle East across five GCC countries reveals that the UAE retains its status as the No. 1 luxury shopping destination in the region, although there was a noticeable shift in spending habits.
Among cities, Dubai was the top choice by respondents in all countries and of all age-groups, while Abu Dhabi was also popular with the older age groups (35 years old and over).
More than 4 in 10 respondents (43 per cent) chose Dubai as their favourite place to shop for luxury items, followed by Abu Dhabi, Doha and Kuwait City.
The survey was conducted by GfK and involved high income households in the UAE, Oman, Bahrain, Qatar and Kuwait.
How much we spend on and what
Guess how much do we spend on luxury shopping every months?
UAE residents spend almost Dh8,500 per month on luxury goods, according to the report, which also adds that our GCC peers in Qatar are bigger spendthrifts than us.
Residents in the five GCC countries continue to spend on luxuries and in the UAE, around 8 per cent of the monthly household income of those surveyed is spent on the good things in life.
This equates to nearly $2,300 (Dh8,447), placing the UAE second in luxury spending behind Qatar, where that figure doubles to $4,074 (Dh14,865).
In the UAE, holidays (34 per cent) and fine dining (32 per cent) are the categories in which people spend the most on non-essential items.
In addition, respondents in the UAE indicated that personal wellness would become more of a priority in the next 12 months, with a third (33 per cent) saying it would become their top luxury spending priority.
We’re spending but cautiously
Less than a fifth of respondents in the UAE (18 per cent) said they spent less in 2015 but it was apparent that many had shifted their spending to focus more on the necessities of life.
Two-thirds of all respondents (66 per cent) spent more on food and drink to consume at home and 69 per cent spent more on household items. A good 40 per cent of UAE respondents also indicated they contributed less to their savings and pensions.
“Despite the economic headwinds across the region, our research shows little slowdown in the volume of spending but we have seen a pretty significant redistribution in how people are spending their disposable income,” said Mazin Khoury, CEO, American Express Middle East.
“It is evident that people are spending more cautiously and are focusing more on essentials,” he continued.
The new spending patterns
The new spending patterns are broadly similar across all age groups although those over 40 are most likely to cut back on socialising with over half (51 per cent) deprioritising this area.
The story is also similar across all five countries surveyed. In Bahrain, for example, 55 per cent spent less on dining out in 2015 while 62 per cent spent more on eating at home – a clear shift in spending habits.
Similarly, in Oman, 88 per cent spent more on food and drinks for home while 41 per cent cut back on socialising.
Despite these shifts, residents in the five countries continue to spend on luxuries and in the UAE, around 8 per cent of the monthly household income of those surveyed is spent on the good things in life.