Dubai: The food and beverage (F&B) sector is set to lead shopping malls’ retail space with an anticipated 10 per cent annual growth rate, an international food consultancy expert said.
“The growth potential is massive if they can deliver on the [dining] experience because people continue to eat out more and more. It is the social glue for family, business and entertainment,” said Francis Loughran, managing director of Future Food, a restaurant and hospitality consultancy.
He was speaking on the sidelines of the Recon Middle East and North Africa, a global shopping centre convention of the region, where expert panels met to discuss future of shopping malls and retail in Mena such as online shopping.
Casual and smart casual dining outlets are expected to lead this growth because of their mid-price options and a large number of new outlets in this category entering the market, he said.
Recently several US-based F&B brands have opened across shopping malls in Dubai and expanded in multiple locations.
With the difficult economic conditions in the US, more F&B companies are looking towards this region for growth.
“In the West, sales in existing companies and shops in the US are not performing as they used to, because of financial problems, and they need to expand to keep revenue growing. What better way to do that than come to Dubai?” said David Macadam, regional director, head of retail at Jones Lang Lasalle, citing the young population of spenders whose palates are accustomed to this type of food.
Shopping on your smartphone
Another hot topic at the conference was the opportunities and challenges of online retailing.
About 30 per cent of UAE residents start their shopping journey online hunting for the best deals and 84 per cent of smartphone users research products on their smartphone before buying at a store, said Wassim Kabbara, industry leader of the Gulf region at Google.
This means that retailers must me present online to bridge the gap between consumers’ needs and companies, he noted.
In Mena, only one per cent of retail sales come from online platforms, he said. “It means this is the future.”
Furthermore, the lease rates of retail spaces in shopping malls are expected to increase next year, Macadam said.
Shop rents rise with the increase in sales and the mall owners have a contract clause that stipulates a certain percentage of sales is paid for lease.
“The future is that rents will go up. Retailers are benefiting from tourism-driven business in the UAE and that remains an opportunity to capture those dollars. There will be more sales from tourists in future,” he said.