Toluna, a leading market research and consumer insights technology provider, recently conducted the latest wave of their multimarket study, Global Consumer Barometer. Now in its 21st wave, the Barometer features data for 18 markets including UAE and KSA and aims to understand the changing needs of today's consumers and how they adapt to the rising cost of living.
According to the report, 50% of those polled in UAE and 38% in KSA are concerned about their own financial security, compared to 41% globally. However, 74% of respondents in UAE and 68% in KSA feel more hopeful about their future than 44% at global level. In the current global economic situation, 63% of respondents in UAE and 61% in KSA expect to properly control expenses until the global economy stabilizes, compared to 60% globally.
Budget control, bargain hunting
The report shows that residents in UAE and KSA are more affected by price fluctuations, particularly in kids' snacks and baby products. To meet their spending budget, 39% of respondents in UAE and 49% in KSA are inclined to switch to more economical options, compared to 36% globally. Both markets showed a commitment to better budget management, with residents planning to reduce unnecessary purchases, change supermarkets for more convenient prices, and shop more efficiently to get the best deal. For instance, 34% of individuals in UAE and 38% in KSA have intentions to switch supermarkets in search of better pricing options, compared to the global average of 28%. Additionally, 34% in UAE and 30% in KSA plan to shop more frequently to minimize waste and secure better deals, as opposed to 25% globally. Lastly, 28% in UAE and 33% in KSA aim to reduce their shopping frequency but purchase items in bulk, compared to the worldwide average of 23%.
Compromises
While residents of UAE and KSA are willing to compromise on some spending habits, they plan to continue spending on beauty and skincare products (UAE 21%/KSA 27%), vacations abroad (19% and 20%), and fitness activities (UAE 22%, KSA 15%).
The motivations for reducing consumption vary by category. For instance, 57% of survey participants in both UAE and Saudi Arabia plan to cut back on electronics purchases for financial reasons, compared to 51% globally. Meanwhile, 46% in UAE and 54% in the KSA plan to reduce their consumption of soda and soft drinks for health and sustainability reasons, while the global average is 36%.
The road ahead
Consumers in UAE and KSA are anticipating a rise in spending in the near future, particularly in regards to food (+54%, +48%), vitamins and minerals (+46%, +40%), clothing (+47%, +42%), gaming (+31%, +28%), and dining out (+43%, +37%). To adapt to these rising costs, 18% of respondents in UAE and 24% in KSA stated their intention to opt for cheaper alternatives to their regular products. Meanwhile, 18% in UAE and 15% in KSA said they would spend less on gaming compared to 13% worldwide, and 19% in UAE and 17% in KSA expressed a willingness to reduce their purchases of premium brands, compared to 19% globally.
Quality vs price
The global average shows that 33% of consumers prioritize price when shopping for groceries, while in the UAE and KSA, the focus is more on quality standards with 26% and 25% respectively. When it comes to choosing between a sustainable brand and their favorite brand, residents in both the UAE and KSA show a preference for sustainability with 7% and 6% respectively, compared to the global average of 6%. Health is also a major consideration in their grocery purchases, with 20% in both the UAE and KSA compared to the global average of 15%.
"What surprised me the most in the latest wave of our Global Consumer Barometer is how UAE and KSA consumers seem to be adjusting to economic hurdles while still embracing eco-friendly habits and focusing on healthier choices, in spite of rising prices. At the same time, they are much more optimistic regarding the future than their global peers, over 20% more, in fact! That’s a clear message for brands to stay tuned and dig a little deeper on this signal. The other interesting insight is that regional consumers Middle East residents choose quality over price while shopping for groceries, whereas in other regions it’s the opposite” commented Georges Akkaoui, Enterprise Account Director, Toluna MEA.
While 42% in UAE and 36% in KSA are concerned about rising rent and mortgage payments, compared to 30% globally, they reported less concern about growing living costs. In line with global trends, seven out of ten respondents in both markets reported being affected by the energy crisis and inflation.
