Dubai: Even with an all-round sales decline in 2016, the UAE’s retail sector still remains the place to be for global brands when it comes to emerging markets. And this was enough for the UAE to be ranked fifth in A.T. Kearney’s annual Global Retail Development Index, with India in the top spot. China, Malaysia and Turkey were placed second, third and fourth, respectively.
The consultancy reckons that retail sales accounted for $73 billion (Dh268.13 billion) last year. “Its risks remain low as other countries in the region battle the effects of low prices and protracted conflicts in Yemen and Syria,” the report states. “The resilient economy should grow about 3.4 per cent annually through 2022.
“While VAT (value added tax) in 2018 will likely have an impact on retail sales, analysts remain bullish on the UAE’s long term prospects.”
And along with the near-exponential growth eCommerce has been having, retail should be on a good footing. Brick-and-mortar operators are adjusting by trying to create value-add opportunities for shoppers as well as reducing their operating costs.
“Past attempts to increase top-line revenue with a larger store footprint have been replaced with a focus on managing expenses, opening digital channels and improving operational efficiencies.”
Saudi Arabia is placed 11th in the A.T. Kearney index, finding that its retail sector actually grew by 4.6 per cent last year. “The sector is one where the government aims to create a lot of new Saudi jobs and is focusing on growing modern formats and e-commerce,” the report says. “Recent regulatory changes — such as allowing 100 per cent foreign ownership in retail and increased financing to small retail enterprises — will strengthen the further development of the sector.”
