Dubai: The UAE retained a Top 10 ranking among retail destinations within the emerging markets universe, in the latest A.T. Kearney Global findings. This is the eighth straight year the UAE gets to do so, though there is a slippage from last year’s fourth position.
UAE retail sales were up 6 per cent to $70.9 million last year, in A.T. Kearney’s projections. During the same period, there was a 7 per cent increase in retail capacity to 1.6 million metres. And more are on the way.
On a compounded basis, retail sector volumes gained 5.3 per cent on a compounded annual basis between 2010-14.
Clearly, the decline in Russian and other tourist arrivals will not put a brake on the pace of new developments as mall owners and retail chain owners look to the future rather than the now.
“The UAE is exhibiting a pattern typical of most retail hubs … the UAE’s economic strength has allowed it to attract the biggest retail brands in the world, introducing them to further lucrative markets in the rest of the GCC and beyond,” said Shamail Siddiqi, Principal of the Consumer and Retail Practice, A.T. Kearney Middle East.
And who will the new developments attract? Luxury brands will continue to steam in as well all manner of F&B concepts, according to the report.
‘Although the market is near saturation, Dubai is cementing its position as the Middle East’s retail hub,’ the report notes. ‘The city’s grandiose retail development has an increasing focus on the luxury segment.’
‘Despite the record drop in oil prices, retail sales growth is expected to continue. Indeed, the retail space pipeline remains strong, with several major projects underway in Qatar, the UAE, and Oman.
‘Kuwait has felt the impact disproportionately, due to its high reliance on oil and relative lack of diversification.’
A.T. Kearney bases its ‘Global Retail Development Index’ on several parameters, including a particular market’s attractiveness for retailers, the element of country risk involved, level of saturation the retail sector has attained, and the time pressure related to entry, among others. Each parameter is then assigned a certain ranking to come up with the final ranking.
China, Uruguay and Chile took the top three positions. Among Gulf states, Qatar entered the Top 10 for the first time, placing fourth, while Saudi Arabia was on 17th.
‘Luxury remains a bright spot in emerging markets, as the wealthy have proven less vulnerable to economic woes than the general population,’ the report states. ‘Mall developers have taken advantage of increased consumer spending and mobility.’
