Business | General

Tourist spending makes UAE retail sales bounce back in first quarter

But consumers remain ‘cautiously optimistic’

  • By Cleofe Maceda, Senior Reporter
  • Published: 16:16 April 9, 2013
  • Gulf News

  • Image Credit: Virendra Saklani/Gulf News
  • Shoppers take advantage of DSF deals at Mall of the Emirates.

Dubai: The influx of tourists from other countries is driving up retail spending in the UAE, with sales rising by five to 10 per cent in the last quarter of 2013, merchants told Gulf News on Tuesday.

UAE residents, in general, are however “cautiously optimistic” largely due to inflation that accompanies an improving economy, as well as a spike in job prospects.

Danielle Ufken, managing partner at Precious Jewels, a distributor of Philip Stein watches in the UAE, the public holidays and retail promotions in the last few months have helped boost the influx of customers from neighbouring countries, especially Saudi Arabia.

“We’ve seen an increase in GCC tourists, especially during the holidays. Dubai seems to be now the alternative destination to Egypt or Lebanon. Dubai Mall is also doing a lot of efforts to increase the footfall by organising special promotions and events. Our daily, [as well as overall] sales have increased,” Ufken told Gulf News.

“The only month that was a little slower as per our expectations was December, whereas November, January and February was excellent. The time shift of the Dubai Shopping Festival did surely contribute to this,” she added.

Ufken said there has been a significant increase in customer traffic not only from GCC countries, but Asian and European markets as well. “The number of Russian customers seems to be the same as last year,” she said.

Basheer Ahmad, general manager at Shoe Mart International, said the spike in retail sales can be taken as a sign that the retail market, as well as consumer confidence, has bounced back. “The market is improving and the customer confidence is returning. Rightfully, the effects of recession are slowly moving away,” said Ahmad.

“The footfall [in our shops] has increased between five and ten per cent compared to last year.”

The rise in retail sales, however, doesn’t necessarily reflect a rise in consumer confidence. Some sources said that the perceptions of consumers based in the UAE may have been dampened by the rising cost of living or basic commodities, among other factors.

Data supplied by research firm Nielsen showed that the UAE’s consumer confidence slipped to the fifth place from fourth place globally between the third and fourth quarter of 2012. The UAE has always been in the top 10 countries.

“UAE consumers can now be described as exhibiting a mood of cautious optimism, largely being driven by a spike in job prospects, in addition to the general inflation that accompanies any growing economy,” Abhik Gupta, Nielsen’s executive director for consumer packaged goods in MENAP, told Gulf News.

“In the past two years, the global Nielsen Consumer Confidence survey has always seen UAE featuring in the top 10 countries when it comes to confidence and it is, therefore, only natural that the markedly upbeat disposition of UAE consumers makes a comeback,” he added.

He said a noticeable recovery in the real estate market, “coupled with solid indicators in the core activities of trade, tourism, logistics and transport are providing clear signals of the UAE’s resilience.”

“We are seeing more tourists, heavier traffic and busier malls, as well as more well-attended conferences and exhibitions and a larger frequency of entertainment events. All of these indicate a healthier economic environment. The country’s growing reputation as a regional safe haven following 18 months of unrest in countries in the region has also contributed to this revival in confidence.”

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