Consumer spending habits to remain low during Eid Al Adha

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Eid Al Adha will be upon us on September 12th making way to five days off for the private sector and nine days off for the public sector in the UAE.

However, schools will also remain closed from September 11th until September 15th, according to KHDA.

Recently, some retail analysts have predicted that consumer spending habits will decrease during Eid Al Adha holiday week. This will mainly be due to residents in the UAE who have already spent a significant amount of money during Ramadan and the period of Eid Al Fitr.

Euromonitor’s Research Analyst, Rabia Yasmeen, expects retail sales during Eid to grow at a lower rate compared to Ramadan and Eid Al Adha the previous year. According to her analysis, shoppers are likely to curb their spending habits after exceeding their budget during Ramadan and Eid Al Fitr, which fell on the 6th of July this year, in conjunction with Dubai Summer Surprises, a shopping festival which kicked off on July 9th.

Major spending habits

Though Eid is considered as a festival of greater expenditure by spenders for consumables and non-consumable items, the retail industry’s outlook will remain positive during this Eid as well. According to Ms Yasmeen, consumers will more likely spend their money on food and entertainment during the holiday rather than on clothes.

Retail overview 

Meanwhile, the retail industry remains confident that this year in Eid sales will surely be upbeat. Retail companies are also expected to witness a healthy growth during this season which is thank fully combined with ‘Back to School’ shopping, according to Landmark Group’s Director Vipen Sethi.

The impact of falling oil prices on consumers

This year, consumer confidence drastically fell due to falling oil prices and concerns regarding the UAE’s global economy.

Despite the retail sector being weak during H1 of 2016, the retail sector did witness growth acceleration during Ramadan, Eid Al Fitr and summer holidays when consumers buy in bunk gifts for their loved ones while at the same time exiting UAE to spend time with family and friends in their country of origin According to Yasmeen, major growth was witnessed in clothing, luxury items, grocery and furnishings.

The Managing Director of retail consultancy Limelight Colin Beaton expects the strategic planning and sale tactics of retailers to remain aggressive with many promotions and discounts for driving sales and footfall under reduced margins. Similarly, malls will also continue to implement marketing formulas such as spend and win, entertainment, thematic displays and attractions with massive media spending on advertising.

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