UAE shoppers go on spending spree ahead of VAT price rise
Monster Employment Index says jobs in consumer goods sector grew by 37% in Q4
The UAE's consumer goods industry witnessed significant growth in the fourth quarter of 2017 as residents prepared for the implementation of VAT in January, according to new figures.
The latest Monster Employment Index (MEI) showed that jobs in the UAE consumer goods industry, which includes FMCG, food and packaged food, home appliances, garments, textiles, leather, gems and jewellery, grew by 37% in Q4 compared to the same period in 2016.
December also marked the beginning of the Dubai Shopping Festival, also coinciding with the holiday season, which always generates an increase in consumer spending, Monster said in a statement.
Sanjay Modi, managing director, Monster.com, APAC & Middle East, said: "I cannot say that this quarter's results are all that surprising. Consumer brands across the UAE were anticipating an influx in purchases in December 2017, as consumers across the UAE rushed to make their purchases before VAT was implemented.
"This, combined with the holiday season and launch of Dubai's Shopping Festival, gave the UAE's consumer goods industry a boost to finish off the year strong."
According to some of the UAE's leading shopping destinations, including Dubai Festival City and Wafi Mall, there was a big increase in footfall to the shopping malls, as well as increased spending.
Euromonitor International also noted that consumers were stocking up on not only their everyday items, such as groceries and household hygiene, but also the more expensive products. This includes electronics, as well as jewellery.
Looking at the electronics sector, most retailers saw a surge in sales, Monster said, adding that the gold and jewellery sector also witnessed a significant increase in sales throughout the last week of December, with some retailers reporting up to five times sales volume compared to the same period last year.
Modi added: "It will be interesting to see how this trend progresses as we move into 2018. In fact, we have already seen a slight slowdown in spending in the first few weeks of in January, compared to the record-breaking figures in December. Of course, this is expected, as consumers across the UAE and GCC are reacting to the newly increased costs of everyday consumer items. In the longer term, we look forward to seeing how positively VAT impacts markets across the region, cutting across the industry sectors."
According to the latest MEI, the chemical industry (including rubbers, paints and fertilizer) witnessed a 23% increase from the same time last year. In under-performing industries, education and IT (including telecom) both recorded a decline of 13%.
HR (including admin) experienced the steepest decline,suffering a 57% decrease from the same period last year, followed by sales (including businesses development) and finance (including accounting) registering declines of 34% and 25% respectively.
Source: Arabian Business