Year-over-Year: Grocery vs. General Merchandise Performance

The 2024–2025 performance data tells a clear story: grocery and fresh food categories are outperforming general merchandise by a significant margin, and the gap is widening. Understanding why — and what it means for retail strategy — is critical for category leaders across the GCC.

Grocery: Resilience Through Necessity

Grocery and fresh food delivered indexed growth of 114 in 2025 (base: 2023 = 100), up from 108 in 2024. The drivers are straightforward: food is non-discretionary, and rising consumer awareness around health and nutrition is driving premiumisation within the category. Private label penetration in grocery has also increased, improving retailer margins even as volumes grow.

General Merchandise: Structural Decline

General merchandise fell to an index of 99 in 2025, down from 103 in 2024 — the only major category to fall below the 2023 baseline. This reflects a structural shift rather than a cyclical dip. Consumers are increasingly purchasing general merchandise through online marketplaces, bypassing traditional retail formats entirely.

Health & Wellness: The Standout Performer

Health & Wellness was the strongest performing category in 2025, reaching an index of 141 — a 19.5% increase year-on-year. This reflects the sustained consumer shift toward preventive health, functional nutrition, and wellness products that accelerated post-pandemic and shows no signs of reversing.

Implications for Space Allocation

The data has direct implications for space allocation decisions. Retailers should be reviewing their general merchandise footprint and reallocating space toward Health & Wellness, Beauty & Personal Care, and Grocery — the three categories delivering the strongest growth. Holding onto underperforming general merchandise space is a margin drag that the data no longer justifies.

Looking Ahead to 2026

The divergence between grocery and general merchandise is expected to continue in 2026. Retailers who act on this data now — adjusting their range architecture, space allocation, and supplier partnerships — will be better positioned to capture the growth that is clearly concentrated in specific categories.