The surge of war in the Gulf, accompanied by US-Israeli and Iranian tit-for-tat threats and attacks on energy facilities, shipping routes, and partial airspace closures for civil aviation, coincides with the start of Eid al-Fitr, the peak consumer season in Gulf Cooperation Council (GCC) states.
This convergence is placing markets under dual pressure from geopolitical tensions and seasonal local demand, and reshaping household spending patterns in the Gulf.
In theory, Eid remains the region's largest spending wave, with retail activity exceeding $60 billion. GCC spending was expected to grow between 8% and 12% compared with last year, according to a March 13 estimate by Middle East Insider, driven by population growth and stimulus programmes.
However, the report cautioned that consumer confidence could falter if direct threats to aviation and supply chains persist in the coming weeks amid the ongoing US-Israeli war on Iran.
Notably, a growing share of this spending is shifting rapidly toward e-commerce and digital services. Estimates indicate online sales could account for nearly one-fifth of total retail sales this Eid, up from around 12% three years ago.
This trend provides retailers with flexibility if travel or foot traffic disruptions recur in traditional shopping centres. It also partially mitigates the psychological impact of security risks on daily purchasing behaviour, the report said.
As the Eid holiday approaches, research published earlier this month by the Atlantic Council suggests Gulf consumers are likely to adopt a selective rather than contractionary approach, reflecting historically notable resilience during periods of tension.
Estimates suggest that while spending on essential needs, social obligations, and regional travel may be maintained, consumers are expected to exercise greater caution on major deferred purchases such as real estate, luxury vehicles, and durable goods.
Sectors most exposed to pressure include aviation, through contested corridors, and hospitality catering to foreign visitors, with pressure expected to last until the political and military trajectory of the current escalation becomes clearer, the report added.
Economist and financial advisor Ali Ahmed Darwish told The New Arab that there are no signs of an end to the ongoing regional conflict in the near term, leaving all scenarios possible.
He noted the immediate and direct negative impact on Gulf economies, highlighting that market performance, both in equities and consumption, remains uncertain amid persistent threats to the Strait of Hormuz.
Consumer activity is currently limited to essential purchases, driven by fear and disruption affecting daily life, Darwish said. He added that this imposed reality is expected to continue as long as the conflict persists, making a normal Eid season unlikely.
Instead, consumer behaviour is focusing on emergency savings and securing basic food supplies, driven by the fear and disruption experienced by citizens in Gulf countries, which has negatively affected normal economic life, Darwish said.
He added that this is expected to continue as long as the war persists, ruling out a normal Eid season this year.
Despite attempts to restart the economy at a minimum level, ongoing military operations and shelling are slowing any recovery or return to normal routines, Darwish said.
He linked any potential improvement in the Gulf economic scene to the end of the war. Until that occurs, economic activity is expected to remain limited to essentials, with consumers awaiting the conflict's conclusion before returning to usual spending patterns.
Article translated from Arabic by Afrah Almatwari. To read the original, click here.