Consumers are finicky even in the best of times. In times of crises, they get panicky. They are human stock markets calibrating retail behavior around brands’ market reactions to geopolitical developments. To avoid a crash in product sales, similar to a market correction, CMOs have to analyze consumer buying, manage product portfolios, contain price volatility, and maintain a strong image of the brand.
Measures like these may not be enough when consumers develop overwhelming fears around an uncertain future.
The good, bad and ugly
The MENA region’s top two players, Saudi Arabia and the UAE, have spent decades envisioning and developing resilient tourism economies, part of non-oil strategies to boost sectors like hospitality, banking, technology and retail markets.
However, due to the war in nearby Iran, that model is now under threat. What’s more, consumers, fearing for their livelihoods, more than their lives, find themselves needing to re-engineer their shopping habits.
They keep hearing the news and it’s bad.
“Daily losses in the Middle East region’s travel and tourism sector are at $600 million, with the UAE taking a big proportion of that hit,” said Nancy Gard McGehee, professor of hospitality and tourism management at Virginia Tech, quoting stats by the World Travel and Tourism Council (WTTC).
Analysis of its 2026 pre-conflict forecast for the Middle East projected $207 billion in international visitor spending across the region, having tourism nearly contributing $70 billion to the UAE’s economy in 2025, nearly 12 percent of its GDP.
Tourism is closely linked to F&B shopping sectors, which, according to research by MarketData, accounted for a 47 percent share in the 2025 Middle East (ME) retail market. The ME imports 50 percent of its food requirements, according to the Food and Agriculture Organization of the UN, relying heavily on Maritime trade with over 80 percent of goods entering via regional ports. The closure of the Hormuz Strait and bombing of regional ports did not help things.
This shock to the system led to a major shift in consumer behavior.
Shifting consumer behavior in the MENA
The United Nations Development Program (UNDP) suggested in March 2026 that the military escalation in the Middle East may cost economies in the region from 3.7 to 6 percent of their collective GDP, a loss of $120-194bn, coupled with an estimated rise in unemployment of up to 4 percentage points or 3.6 million jobs lost.
Abdallah Al Dardari, UN Assistant Secretary General and Director of the Regional Bureau for Arab States in UNDP, said: “Our findings underline the pressing need to strengthen regional collaboration to diversify economies, expand production bases, secure trade and logistics systems, and broaden economic partnerships, to reduce exposure to shocks and conflicts.”
Cindy Bowdan, Insights Director at Borderless Access, an insights solutions company, said the region’s ten-million-strong expatriate community was asking a question nobody wanted to answer: “Should I stay?”
A recent resident sentiment study by Borderless Access across the UAE and Saudi Arabia, spanning every income band from the middle class to skilled working class, revealed that 53 percent of residents are currently anxious.
On safety perception, 88 percent felt safe in Saudi Arabia versus 78 percent in the UAE.
Consumer sentiment was cautious, observant, and highly responsive to changes in price, availability, and perceived value.
The study showed expats experiencing higher levels of anxiety than locals, reflecting concerns around job security and long-term stability.
Around 51 percent of residents remained optimistic about the economic outlook over the next 12 months, with 53 percent expecting their personal finances to improve.
The GCC consumer can apparently hold anxiety and hope in the same breath, without apparent contradiction, despite only 20 percent of residents feeling secure in their jobs and 30 percent actively saving more than before, suppressing discretionary spending categories like entertainment, dining, and fashion. These have witnessed the steepest footfall reduction. For example, up to 62 percent of UAE residents report visiting entertainment parks less frequently, with restaurants and malls down 51 and 56 percent, respectively.
Rise in F&B buying and energy costs
Essential spending on food and beverages has risen by nearly 28 percent, as consumers are ready for potential disruptions by stockpiling and avoiding inflation, as 60 percent of residents say prices of essential goods have risen, up to 75 percent in the UAE, since the conflict began.
“Energy is embedded in every cost line—raw materials, manufacturing, transportation and packaging. The Strait of Hormuz is not merely an oil corridor. It is a critical artery for the global petrochemical complex,” said Doug Lane, Water Tower Research.
GlobalData’s retail managing director Neil Saunders also added: “The most immediate impact comes from higher oil prices. Energy is a huge component of retail transportation costs.”
Water Tower Research reports that Red Sea and Suez Canal traffic was down about 60 percent from pre-crisis levels in January.
This has left shippers needing to transit around Africa’s Cape of Good Hope, adding an extra 3,500 nautical miles, an additional 10 to 14 transit days and about $1 million in incremental fuel costs per voyage.
Finally, not to be underestimated, the recent spate of AI-driven layoffs, a total of 100,000 in 2025 and 30,000 and rising so far this year, has disproportionately hit high earners at companies such as Accenture, Block, Citigroup, HP, Intel, Intuit, Meta, Microsoft, and SAP globally. With many of these companies operating in the region, once highly paid tech employees now find themselves unemployed, adding a sobering thought to a more somber retail outlook.
