Dubai: The UAE retail sector is likely to see modest growth this year over 2015 due to the low price of oil and high retail rents, according to an industry expert.
“I expect the growth to be between 3.5 per cent and 4 per cent,” Abdullah Fareed Al Gurg, general manager of Dubai-based conglomerate, Easa Saleh Al Gurg Group, told Gulf News on Tuesday.
Consultancy Euromomitor International predicts the UAE retail market to be valued at $53.7 billion in 2016, up 7 per cent over 2015.
He said he expects a bigger growth in the retail market in 2017 as more attractions open.
“In Dubai, there will be new theme parks opening this year and new hotels up and running, as well as new restaurants. All of this will attract more people who will spend. Instead of spending three days, tourists will spend five days, for example,” Al Gurg said.
The low price of oil, which has collapsed by more than 70 per cent since mid-2014, and the strong dollar — to which the UAE dirham is pegged — against currencies like the euro and rouble over the last year, has made holidaying in the UAE more expensive for European and Russian tourists.
Al Gurg pointed out that the purchasing power of Russian customers was lower last year compared to 2014. But he said that he has seen more spending by Indian and African buyers.
Al Gurg was speaking on the sidelines of a press conference in Dubai on Tuesday announcing the company’s joint venture with Dutch paints and coatings company AkzoNobel, creating AkzoNobel Decorative Paints.
Easa Saleh Al Gurg Group is a diversified company with operations in the retail, construction and industrial sectors.
The company already has joint ventures with global companies like Siemens and Unilever.
With brands like United Colors of Benetton and Better Life in its portfolio, it is also looking to launch two new retail brands from Europe in the next two years, Al Gurg said, without disclosing details.
