Findings from a survey commissioned by American Express Middle East across five GCC countries show that the UAE still ranks as the number one destination for luxury shopping in the region. 43% of respondents chose Dubai as their favourite place to shop for luxury items, followed by Abu Dhabi, Doha and Kuwait City.
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). The American Express Middle East Spending Survey was conducted by GfK and involved high income households in the UAE, Oman, Bahrain, Qatar and Kuwait.
The research found little slowdown in consumer spending in 2015 despite economic uncertainties in the region, although there was a noticeable shift in spending habits. Just 18% of respondents in the UAE 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%) spent more on food and drink to consume at home and 69% spent more on household items. 40% 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, Chief Executive Officer, 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 are broadly similar across all age groups although those over 40 are most likely to cut back on socialising with over half (51%) deprioritising this area. The story is also similar across all five countries surveyed. In Bahrain, for example, 55% spent less on dining out in 2015 while 62% spent more on eating at home – a clear shift in spending habits. Similarly, in Oman 88% spent more on food and drinks for home while 41% cut back on socialising.
Despite these shifts, residents in the five countries continue to spend on luxuries and in the UAE, around 8% of the monthly household income of those surveyed is spent on the good things in life. This equates to nearly $2,300 placing the UAE second in luxury spending but behind Qatar, where that figure doubles to $4,074. In the UAE, holidays (34%) and fine dining (32%) 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%) saying it would become their top luxury spending priority.
Mr Khoury added: “American Express has been in the Middle East for over 50 years and throughout this time we have helped our Cardmembers manage their finances through the ups and downs of economic change. Whether they use their cards to pay for their weekly shopping or a holiday, they have the confidence knowing that our organisation is behind them providing world class benefits, customer service and security.”