Sales may not lure shoppers to DSF: Survey

Weak consumer demand is expected to be the main challenge for retailers at Dubai's annual shopping festival, a survey said on Sunday, in stark contrast to previous years.

Only five percent of consumers in the United Arab Emirates said they increased spending on goods and services in the last six months, after improvements in personal finances, a consumer survey by Datamonitor said.

Most consumers were living from pay-cheques and paying off debts, while taking steps to control discretionary spending, the survey said. It did not say how many people it polled.

Dubai's property sector crashed in late 2008 as the global financial crisis took its toll, leading to job losses, project cancellations and delays worth billions of dollars. As the economy suffered, tourists, who make up a large chunk of shoppers, and residents tightened their belts, leading to sharp drops in retail sales across the emirate's 40-plus malls. Dubai Mall, the region's largest shopping centre, as well as other populated malls in the emirate, boasting the world's top luxury brands, started discounting prices up to 70 per cent prior to Dubai Shopping Festival (DSF), which starts January 28 and lasts for a month.

"Seventy percent of UAE consumers now claim to be actively taking measures to control expenditure; 40 per cent claim to be consciously making lifestyle changes to save money. Only a minority (11 per cent) feel now is the time to take advantage of weak retail prices," said Richard Adams, analyst at Datamonitor.

DSF will have to present more than just price cuts to attract buyers, Adams said, adding clever marketing was key as consumers were not ready to splash out on luxury items.