Dubai: The UAE’s retail sector is expected to reach Dh200 billion by 2017, growing by five per cent on average each year, according to an analysis by the Dubai Chamber of Commerce and Industry.
Consumer spending is also expected to continue rising in the medium term, with growth rates projected to stabilise at about four per cent on average per year, leading to a total spending of more than Dh750 billion by 2017 across many categories.
According to the Dubai Chamber, the data they have gathered from several sources, including Euromonitor and ATKearney, indicate that consumer confidence in the UAE has not been negatively impacted by expectations of decelerating economic growth in the region. Retail sales and consumer spending data alone show that the retail sector is growing faster than the UAE economy as a whole.
“The UAE stands out as one of the leading retail centres in the region. Retail is an important pillar of Dubai’s economic diversification strategy,” said Hamad Buamim, president and CEO of Dubai Chamber. “The analysis will not only boost the sentiments of the retail sector in the region, but also help raise investor confidence in the market,” he added.
The retail and wholesale trade in the UAE accounts for more than 11 per cent of the UAE’s gross domestic product (GDP) and close to 30 per cent of Dubai’s GDP.
A number of indicators point to a growing retail industry in the UAE. Retail space alone increased by 7 per cent during 2014 to reach 1.6 million square metres. At the same time, retail sales in the UAE reached Dh173 billion, growing by more than 6 per cent compared to 2013.
The Dubai Chamber said this translates to more than Dh20,000 retail sales per capita in a year. In terms of consumption, households spent Dh673 billion in 2014, growing by 6.7 per cent per year in real terms. In nominal terms, household spending growth was higher, at 9.2 per cent year-on-year.
“Those figures indicate a normalisation in consumption patterns, compared to large shifts occurring in previous years,” the Dubai Chamber said.
“In 2009 and 2012, consumer spending had even registered negative growth. Spending per capita increased by 5.7 per cent to reach more than Dh79,000 in 2014. This means that each person spends on average more than Dh6,500 a month.”
Retail and wholesale trade in the UAE is an important sector, accounting for more than 11 per cent of the country’s gross domestic product (GDP) and close to 30 per cent of Dubai’s GDP.