Consumer spending on Fast-Moving Consumer Goods (FMCG) in Saudi Arabia and the UAE exhibited marginal growth in the final quarter of 2023, registering an uptick of less than 0.5 percent. A market analysis by NielsenIQ points to increased price sensitivity and a reorientation of consumer preferences as key factors behind this moderate recovery.
Despite the sluggish recovery in traditional retail sectors, e-commerce platforms experienced significant consumption increases during the same period. This trend is consistent with the growth patterns observed over the prior three years.
“In the final quarter of 2023, we noted a decrease in prices for e-commerce Fast-Moving Consumer Goods (FMCG) categories, with a reduction of approximately 3 percent in the UAE and 5 percent in Saudi Arabia,” stated NielsenIQ in its Retail Spend Barometer. This price reduction is credited with a consumption surge of 28 percent in the UAE and 16 percent in Saudi Arabia.
While the UAE’s modern trade channels saw a slight increase in FMCG consumption at 2.3 percent, there was a 3 percent drop in overall FMCG during the same timeframe. The report suggests that rising prices are causing these divergent consumption patterns, particularly within the Baby Care category in Saudi Arabia and the Personal Care category in the UAE.
According to the NielsenIQ analysis, a significant proportion of FMCG categories—63 percent in Saudi Arabia and 88 percent in the UAE—saw price hikes of up to 10 percent.