The macro-economic, political and regulatory headwinds of recent years have led to a slowdown in GDP growth and weakening consumer confidence. Against the backdrop of various austerity measures due to the fiscal gap; rising utility pressures, visa price increases (KSA) and sugar taxes introduced in quarter 4’2017, 2018 marks further sentiment and wallet woes for consumers as VAT comes into effect.
In 2017 the US$19BN (KSA) and US$6.5BN (UAE) consumer goods markets faced growth compression with both countries reflecting declining sales in food and non-food categories, with this likely to continue in 2018.
While the absolute 5% VAT tariff is nominal for consumers compared to many countries around the world, the initial unfamiliarity with tax policy and implementation and the compounded financial effect is likely to spur changes in consumer, category and shopping mindset and behavior.
Download the report for insight into how what consumers are likely to do, and how manuactuers and retailers can respond.