Dubai: Retailers expect to generate modest sales growth during the Dubai Shopping Festival (DSF), the month-long annual shopping bonanza, amid slower growth in the retail market.
Consumers have been tightening their budgets and growing more cautious about spending over the last year, as weaker oil prices have lowered their confidence. European and Russian tourists have cut down on spending too, as a strong dollar — which the UAE dirham is pegged against — the euro and rouble have made shopping here more expensive for them. Regional instability has also discouraged some travellers from visiting the country.
Paris Gallery, a Dubai-based luxury retailer, expects an 8 to 10 per cent growth in sales this month compared to December 2015, helped by DSF promotions, said Mohammad Abdul Rahim Al Fahim, its chief executive. However, sales during DSF are anticipated to grow by 25 per cent when compared to the same time in 2015, Al Fahim told Gulf News.
Luxury retail sales in the UAE were almost flat in 2015, according to Diana Jarmalaite, research analyst at consultancy Euromonitor International.
“Within the store based retailing, luxury retailing has remained almost flat, while economy-priced brands have boosted their popularity among consumers,” she said.
The country’s luxury goods market was up 9 per cent to Dh15 billion in 2014. However, the growth rate is forecast to decline to 7.5 per cent in 2015, with the market valued at Dh16.48 billion, according to data from Euromonitor International.
Customers who buy products worth Dh750 at Paris Gallery’s stores can win prizes, according to Al Fahim.
“Customers pick a sealed envelope where they could win up to Dh10,000 worth of gift vouchers and other discount vouchers,” he said.
For consumer electronics retailer Plug Ins, sales are expected to grow by 30 per cent month-on-month in January, according to its general manager, Omar Abushaban. However, year-on-year sales during DSF are expected to grow at a lower rate compared to 2015.
“We had a strong performance last year during DSF where we recorded year-on-year growth of almost 15 per cent in comparison to DSF 2014. We’re very optimistic about a great DSF 2016 and would keep our forecasts to a modest single digit year-on-year growth of about 8-9 per cent,” he said.
Vipen Sethi, chief executive of Landmark Group, which runs the Centrepoint, Splash and Babyshop stores, hopes to achieve “a modest growth in DSF 2016 as compared to the same period in 2015”. He declined to give a sales forecast.
Paris Gallery’s Al Fahim expects the best-selling product categories during DSF to be cosmetics, perfumes and watches.
At Plug Ins, smartphones are anticipated to be the best-selling products, Abushaban said.
“However, with the launch of some exciting new products [in 2015], we’re also anticipating strong demand for wearable gadgets including Apple Watch, Huawei smartwatch, Samsung Gear S2 and fitness gadgets from Fitbit and Jawbone,” he added.
