Market research firm Toluna interviewed more than 16,000 consumers across 20 markets around the world in January, including 500 in the UAE.
The survey results show that 69 percent of UAE consumers say the energy crisis and rising cost of living are affecting their spending plans, compared to 66 percent of global consumers.
However, 42% are confident about spending money in the next few months, up 4% from the previous report in September 2023, indicating growing consumer optimism.
The survey also found that the top items on which UAE consumers do not save are groceries (29%), personal care and hygiene products (21%), and everyday healthcare products (21%).
Conversely, people are likely to cut back on spending on luxury goods and services (37%), vacations and holidays (23%), and eating out and drinking (21%).
Additionally, 34% of people plan to spend less on gifts, social activities, etc. during the December holiday season compared to last year.
“While most consumers purchased brands and products they knew, younger consumers (ages 18-44) were more likely to try new items over the holiday season.” The report states:
Categories in which consumers tried new products included sweet treats such as desserts and cakes, as well as savory snacks.
Health and wellbeing remain key purchasing motivators, with 63% of UAE consumers saying the rising cost of living is affecting their health and wellbeing, compared to 53% in the APAC-MENA region.
Their efforts to “focus more on health and wellness” include eating healthier foods, choosing vegetarian and vegan options, taking vitamins and other nutritional supplements, and drinking low- and non-alcoholic beverages.
Notably, three in four respondents globally believe food and drink brands should offer a wider range of healthier options, and they also expect companies to provide “better information” about the health and wellbeing benefits of their products.
80% of consumers overall surveyed expressed wanting healthier foods and beverages to be more available in stores, and also expressed a desire for more cost-effective health, wellness and fitness solutions.
Additionally, 70% of people buy cheaper or supermarket brand health and wellness products, 69% of people want to make healthier choices but can’t afford it, and 66% think brands don’t do enough to help them make healthier choices.
These findings highlight gaps and opportunities for companies to offer products that “resonate” and suit consumers across different segments of purchasing power.
“Brands should focus on communicating value. In areas where products are perceived as rewards or luxury items, messages that communicate value along with more emotional self-fulfillment cues are needed.”
Emphasis on ESG
Despite the current economic climate, social and environmental responsibility remains important for brands, as consumers pay close attention to this aspect.
The report found that 34% of UAE respondents said it has become more important for brands to be socially and environmentally responsible, while 53% said it is as important as before.
In fact, 76% of respondents said they make an “extra effort” to engage with brands that align with their values, and 81% have started using or are using brands more often because of their positive environmental or social practices.
Meanwhile, 77% say they would stop using a brand because of negative activity.
Additionally, many UAE consumers want to choose brands based on environmental and social factors but are not well informed or able to afford to do so.
To meet these demands, companies need to implement “credible” and transparent Environmental, Social and Governance (ESG) policies and undertake environmentally friendly practices such as reducing the use of plastics and packaging.
“Companies are being asked to do the right thing across the areas of values, wellness and ESG. If they can balance these elements while maintaining their brand values and personality, they will differentiate and stand out.”
