Dubai: Merchants across the UAE enjoyed a surge in sales during the last quarter of 2017, as consumers cashed in ahead of the implementation of value-added tax (VAT) and store discounts hit as much as 90 per cent.
The rise in spending has opened up a lot of opportunities for jobseekers, with the consumer goods industry recording a 37 per cent increase in online hiring during the last three months of 2017, according to the latest Monster Employment Index (MEI).
Authors of the index said the industry witnessed a significant growth in the last part of 2017, as residents across the emirates prepared for the implementation of VAT. It was also in December when the Dubai Shopping Festival (DSF), which coincided with the holiday season, kicked off.
“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," said Sanjay Modi, managing director of Monster Asia Pacific and Middle East.
"This, combined with the holiday season and launch of DSF, gave the UAE’s consumer goods industry a boost to finish off the year strong,” he added.
Nicola Kosutic, senior research manager at Euro monitor International, said retail sales in the UAE did spike in December, as consumers opted to stock up or buy big-ticket items before January's VAT implementation.
"Sales were fueled by retailers running promotional campaigns. However, in many instances, retailers increased prices in November and December so that they can run 'VAT-free' and 'VAT-is-on-us' campaigns in January but in many instances prices went up by more than 5 per cent."
According to Euro monitor’s data, retail sales in the UAE reached Dh189.6 billion in 2017, an increase of two per cent compared to the previous year.
More jobs created
Other companies, such as those in the chemicals industry, also created more jobs in the last quarter of 2017 compared to a year earlier, with online vacancies in organizations dealing with rubbers, paints and fertilizers rising by 23 per cent.
However, employers in the education, information technology, including telecommunications, didn’t hire as much, with online job listings dropping by 13 per cent.
Dubai’s shopping festival kicked off in late December 2017, just before VAT took effect. Businesses confirmed last week that the retail bonanza, which ended last weekend, was instrumental in driving sales.
Malls across Dubai, including Mercato, Dubai Festival City and Nakheel Malls also reported a 10 per cent year-on-year increase in footfall numbers during DSF.
Majid Al Futtaim Properties, which has Mall of the Emirates (MOE) in its portfolio, reported “robust increases” in shopper traffic during the first two weeks of DSF alone.
Spike in card usage
According to Visa, there has also been an increase in card usage among shoppers, citing that payment transactions with DSF-participating merchants went up by 27 per cent, when compared to the previous edition of DSF.
The Monster Employment Index report noted that sales in the electronics and jewellery sectors increased significantly throughout the last week of December 2017, with retailers reporting up to five times sales volumes compared to the same period last year.
“It will be interesting to see how this trend progresses as we move into 2018," said Modi.
"In the longer term, we look forward to seeing how positively VAT impacts markets across the region, cutting across the industry sectors.”
(Source: Gulf News)