Emerging markets can offer Middle East retail what it wants

Dubai: The Middle East’s retail sector — where massive new capacities are being created in the UAE, Qatar and Egypt — could offer the lift that global brands find increasingly hard to come by elsewhere.

“Emerging markets in South America, Eastern Europe and the Middle East will continue to attract new market entrants, particularly where well-located, new shopping centres provide an opportunity for incoming retailers,” states a report — ‘How Global is the Business of Retail 2013’ — released on Monday by CBRE.

“Asia-Pacific has driven global retail growth in recent years and will continue to do so... however, as economic growth slows in the region, there will be fewer easy wins than previously. Regulatory hurdles and, in some sectors, increased competition from local brands pose additional obstacles for retailers planning to expand in the region.

“In Europe, retailers still face a challenging economic environment, and as a result retailers’ expansion ambitions for 2013 are similar to last year, with Germany expected to remain the main target, reflecting its relatively strong economy within the Eurozone area.

“In general, there is a lack of new prime retail space globally which is limiting the ability of some retailers to meet their expansion plans. This is most notable in mature markets but also affects many emerging markets where much of the new development is in the peripheral areas of large cities.”

And then there is the looming scale online retailing is taking on. “Whilst some will downsize their store presence, the vast majority are embracing the multi-channel approach — they are developing their online presence, but they are also investing in new store openings and their existing stores,” the report adds.

“For many retailers, opening stores in new markets is also a priority, underpinning our view that cross-border activity will continue at a steady pace in 2013.”