SAUDI ARABIA’S CONSUMER SPENDING RESILIENCE CONTINUES INTO 2025, ALIXPARNTERS SURVEY REVEALS

Saudi Arabia’s spending intentions for 2025 show a 6-percentage-point net positive trend, contrasting with spending contractions in U.S. and Europe. Increased spending in Groceries (56% vs 54% last year) and Clothing (43% vs 40% last year), trend to continue into 2025. Dining out remains a polarizing category: one third of Saudi consumers plan to spend more, while globally, 34% intend to spend less, with only 19% planning increase. 33% of Saudi consumers plan to boost spending on entertainment outside the home, compared to just 19% globally.

Arabia’s consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges, according to the latest insights from 2025 Global Consumer Outlook published by AlixPartners, the global consulting firm. Despite global trends of reduced discretionary spending, Saudi consumers exhibit robust spending intentions, with a focus on value and cost efficiency as part of their purchasing strategies across essentials and discretionary categories.

The report, based on responses from over 15,000 consumers across nine countries presents a nuanced global picture - while spending is resilient in Saudi Arabia, UAE, and China, it contrasts starkly with spending restraint in the U.S. and Europe, where spending next year is projected to decline further from this year’s already-muted levels, signalling another challenging year for global consumer-facing industries.

Saudi consumers are expected to maintain robust spending habits into 2025, driven by strategic priorities and a strong focus on essentials and experiences. Saudi households are navigating rising costs with a strategic approach, often adopting more value-oriented choices to balance their spending priorities. For instance, in groceries, there is a clear trend of consumers trading down to entry-price ranges and private labels, while discounters across retail segments—whether grocery or fashion—are gaining ground at the expense of established chains by offering better value.

Demographic insights reveal that younger consumers (18-34) are driving growth across most retail segments, reflecting a strong appetite for new experiences and products. Meanwhile, spending on essentials like groceries and clothing remains consistent across all age groups and income levels. Low-income shoppers are focusing on necessities in response to inflation, while high-income groups are fuelling growth in discretionary categories, supported by their greater disposable income.

AlixPartners’s report, titled Spending Disrupted, identified several key trends in the Kingdom across categories, including:

Value-Driven Consumption: Grocery (55.4%) and Clothing (43%) categories dominate as key spending categories same as last year, with consumers prioritizing value-driven deals and savings.

Rise of Discounters: Discount-driven retailers are transforming consumer expectations, challenging established market players and altering shopping behavior.

Growth in Entertainment and Dining: 33% of Saudi Consumers plan to increase spending on entertainment outside of home, well above 19 % global average. Dining out also remains a robust category - one third of KSA consumers plan to spend more on eating out, while globally 34% intend to spend less. Younger shoppers under 35 are leading spending growth showcasing a strong appetite for new experiences and products.

Shift Towards Local Experiences: Desire to travel remians strong, affordability and expanding domestic tourism offerings have driven more consumers toward local staycations.

Digital Integration and Shopping Convenience: Digital tools and technologies, including AI-driven product suggestions, mobile payment solutions, and delivery services, are becoming essential elements of consumer shopping experiences.