23-06-2025
Middle East customers concerned about inflated grocery prices: Report
Shoppers across the Middle East are scaling back on non-essential spending and reprioritising grocery purchases, as inflation and global trade tensions continue to pressure household budgets, according to Blue Yonder's 2025 Global Consumer Sentiment on Grocery Inflation Survey.
The report, which surveyed more than 6,000 consumers globally, including across the Middle East, found that 82 percent of respondents in the region are concerned about inflated grocery prices, prompting visible shifts in consumption patterns across both essential and discretionary categories.
Tariffs cited as main cause of rising grocery costs
Half of Middle East consumers surveyed believe newly introduced global tariffs are the leading driver of grocery inflation. This perception is consistent with responses from the US (65 percent) and the UK (56 percent), where tariffs also ranked as the top contributor to price increases. Other factors include the rising cost of raw materials (42 percent globally), increased labor costs in manufacturing and food processing (39 percent), and higher profit margins for brands and manufacturers (33 percent).
'In today's global market, tariffs are significantly impacting grocery supply chains, resulting in inventory and logistics challenges, as well as increased costs for both retailers and consumers,' said Wynkoop. 'Leveraging advanced technology for AI- and ML-driven scenario planning and visibility across the end-to-end supply chain can help grocers mitigate tariff-related disruptions by increasing agility, resilience and cost savings.'
Discretionary spending takes a hit
To manage higher grocery expenses, consumers in the region are cutting back on non-essential spending. According to the survey:
47 percent of Middle Eastern respondents are most likely to reduce spending on clothing and footwear
40 percent said they would scale back on streaming and gaming subscriptions
These were also among the top global categories impacted, with more than half (56 percent) of respondents globally willing to reduce spending on apparel, followed by electronics (46 percent), subscriptions (43 percent), and personal care (36 percent).
Discount shopping, promotions, and private labels
Globally, 65 percent of respondents said they are buying fewer grocery items to cope with inflation. In addition:
42 percent are shopping more frequently at discount or wholesale stores
36 percent are increasingly drawn to promotions and discounts
34 percent are switching to private label products
'During times of economic uncertainty, consumers often look for ways to save money on essential items such as groceries, from shopping at discount stores to seeking out sales and opting for private label brands,' said Wynkoop. 'As a result, retailers tend to prioritise and invest more heavily in their owned brands to accommodate these changing shopping behaviors. Sophisticated retailers are becoming more vertically integrated from production to consumer to maintain greater control over their supply chain, increase profitability and deliver more affordable products to shoppers.'
These shifts reflect a wider behavioural trend where consumers are seeking greater value and affordability in day-to-day purchases. In the Middle East, this trend is playing out in similar ways, with retailers observing rising demand for value-driven grocery options and loyalty programs tied to pricing incentives.
Retailers under pressure to adapt
The report suggests that advanced technologies, including AI and machine learning, can play a critical role in helping retailers manage inflationary pressures by optimising inventory, pricing, and sourcing decisions across the supply chain.
'With most consumers willing to adjust shopping habits in response to grocery inflation and mounting financial pressures, retailers – not just grocers – need to recognize the importance of building trust with shoppers through transparency, targeted promotions and affordability-first strategies,' Wynkoop added. 'Having the right supply chain solutions can help retailers win with consumers during times of both economic prosperity and difficulty.'
