United Arab Emirates (UAE) consumers spent a total of $3.8bn on fast-moving consumer goods (FMCG), technology, and durable goods in the second quarter (Q2) of 2024.

This represents a 3.4% increase compared to the same period last year, according to the latest findings from the NIQ Retail Spend Barometer, powered by GfK intelligence.

FMCG sales reached $2.3bn, showing a 4% rise while technology and durable goods accounted for $1.5bn, with a 2.6% increase compared to Q2 2023.

These figures reflect sustained consumer demand across essential products and high-value items such as electronics, contributing to the overall growth in retail spending.

Impact of seasonal and economic factors

The strong consumer spending in Q2 followed a more intense retail period in Q1 2024, driven by events such as the Dubai Shopping Festival, pre-Ramadan sales, and the launch of the Samsung Galaxy S24.

These factors led to higher spending early in the year, with Q2 showing a more moderate growth pattern.

After the Ramadan season, the retail market typically slows, with mid-year holidays and reduced tourism further impacting sales. However, the slower Q2 performance is seen as part of a natural fluctuation following a strong first quarter.

The demand for electronics, in particular, stabilised after a period of heightened interest, with expectations for a gradual recovery by 2026-27.

FMCG and technology sector trends

In the FMCG sector, the growth rate improved from 2.3% in Q2 2023 to 4% in 2024, suggesting a recovery following earlier declines in Q1.

Factors such as changing consumer behaviour, economic conditions, and successful product launches may have contributed to this positive shift.

The technology and durable goods market showed a different trend. Despite a strong start in Q1 2024, with growth reaching 11%, Q2 saw a significant decline, dropping to 2.6%.

This decrease could be attributed to factors such as market saturation or supply chain issues, which dampened demand.

Outlook for the UAE retail sector

Despite these fluctuations, consumer spending in the UAE remains strong. Retail experts suggest that the country’s economy and consumer confidence continue to support growth, albeit at a slower pace.

As the UAE attracts foreign investment and continues to innovate, the retail sector is expected to remain stable with further expansion on the horizon.