RIYADH: Retailers in Saudi Arabia and the UAE have reported higher turnovers in recent months due to inflation rises and consumers increasing spending on necessities, according to a global business outlook survey.
During the third quarter of 2022, fast-moving consumer goods sales increased by 6.5 percent year-on-year in Saudi Arabia and 8.8 percent in the UAE, according to the most recent study from global information services company NielsenIQ.
“Higher prices are fueling the growth of fast-moving consumer goods turnover in both the UAE and KSA,” according to NielsenIQ.
Data used in the study was sourced from hypermarkets, supermarkets, grocery stores, beverage catering shops, pharmacies, and perfume shops.
In turn, the cost of essential goods has doubled, and retailers have resisted offering promotions in-store.
Although promotions have decreased in intensity in Emirati and Saudi markets, food stores have raised their prices in 86 food categories alone, NielsenIQ reported.
Between July and September 2022, frozen items prices in Saudi Arabia rose by 15 percent, while the price rose by 19 percent in the UAE. Saudi Arabia and the UAE also saw increased demand for dairy products by 18 and 14 percent, respectively.
However, in comparison with the sales volumes reported during the first quarter of 2022, the UAE market saw a decline of 1.5 percent, while the Saudi Arabian market saw a decrease of 3.6 percent in sales volume.
Research has revealed the value of consumer purchases at retail establishments have gone up due to the increase in pricing, however fewer purchases are being made as a result of this increase.
“Price increases cause the two countries’ significant nominal value growth," according to Andrey Dvoychenkov, general manager of NielsenIQ’s Arabian Peninsula and Pakistan region.
However, he continued: “They are still willing to pay more for goods that offer greater functionality and advantages.”
As of September, of this year, inflation in Saudi Arabia increased by 3.1 percent, largely due to an increase in the cost of food, housing, and utilities, while consumer inflation in the UAE increased by 4.6 percent year-over-year in April 2022.
