Well-off Bahrainis cut back on spending, savings

Manama : A large proportion of high-income earners in the Kingdom have cut back on their spending and also failed to maintain their savings in 2015. This was revealed in the American Express Middle East Spending Survey, conducted by GfK, released yesterday in the Kingdom.

Thirty-nine per cent of the Bahrain respondents indicated that they had to cut back spending and 43pc of respondents contributed less to their savings and pensions in 2015. The steep-cut in spending is the highest of all countries surveyed.

The survey involved a series of face-to-face interviews and was undertaken by GfK in November and December 2015. The 430 respondents surveyed are active decision makers for luxury purchases in their households, and have annual household incomes of US$75,000 or higher. The survey was carried out among residents of UAE, Oman, Qatar, Bahrain and Kuwait, who had lived in the country for at least one year. Seventy-five respondents participated from the Kingdom.

The average luxury-spend among this high income group in 2015 in Bahrain was only US$730 a month, equivalent to 6pc of their monthly household income; far below the US$2,000 regional average and only a fraction of Qatar highest spenders’, who dished out US$4000 a month last year and thus topped the region.

The survey results were presented by Mazin Khoury, Chief Executive Officer, American Express Middle East in a media roundtable yesterday.

Spending habits in Bahrain also witnessed big shifts in preferences with essentials receiving more attention than luxuries. Seventy-two pc of respondents indicated that they spent more on rent and 62pc respondents spent more on food and drink.

Also, there is a shift towards spending more for experiences than luxury products according to the survey. Fifty-six pc respondents preferred to gain great experiences than buying physical goods and the trend is expected to continue in 2016 with holidays, fine dining and hobbies retaining traction among big spenders.

As with a previous survey carried out in 2014, holidays rank as the number one category for luxury spending in Bahrain.  For nearly a quarter of residents (23pc), this is the priority area in 2016 with a further fifth (19pc) planning to spend their money on fine dining. 

The study also says that Bahrain is not able to retain its high spenders for luxury spending, and 43pc of them prefer Dubai for their luxury spending. “Despite the economic headwinds across the region, our research shows little slowdown in the volume of spending but we have seen a significant switch in how people are spending their disposable income. It is evident that people are spending more cautiously and are focusing on essentials,” said Khoury.