GCC retail industry projected to reach $390 billion by 2028

Dubai: The retail sector in the Gulf Cooperation Council (GCC) is experiencing a significant transformation, fueled by digital innovation, evolving consumer preferences, and strategic government initiatives.

According to a new report by LOGIC Consulting, titled “Revolutionizing Retail: Unveiling GCC’s Five-Year Transformation,” the region's retail industry is projected to grow to over $390 billion by 2028.

Once dominated by traditional retail models, the GCC retail market is now a major driver of economic diversification and technological advancement. The sector is no longer just a space for transactions but is increasingly becoming integral to national development goals, energizing related industries such as logistics, real estate, and tourism.

Changing consumer expectations

Consumers in the GCC have evolved, with increased digital fluency and a greater demand for personalized and seamless experiences. According to the report, 87% of consumers in the region now use a combination of online and offline channels for shopping, making the retail experience “phygital” — blending the physical and digital worlds.

Shoppers are increasingly time-sensitive and experience-driven, demanding more than just product availability. As a result, retailers are focusing on enhancing both in-store and digital offerings to cater to these shifting preferences.

Food, non-food retail: Key growth segments
The retail market is divided into two major categories: food and non-food retail. Food retail, which includes groceries and related products, is expected to see growth from $127.2 billion in 2023 to $162 billion by 2028, driven by urbanization and changing dietary habits. Meanwhile, non-food retail, including sectors such as luxury goods, electronics, and fashion, is outpacing food retail, with a compound annual growth rate (CAGR) of 6.2%. It is projected to reach $243.6 billion by 2028.

Saudi Arabia and the UAE remain the largest retail markets in the GCC, accounting for more than 75% of the region’s retail sales. This dominance is expected to continue and even grow in the coming years.

Digital retail and AI disruption
The GCC retail sector is increasingly embracing digital-first strategies. The rise of “quick commerce” — ultra-fast delivery within 30 minutes — is reshaping how consumers access everyday essentials. E-commerce giants like Noon and Amazon.ae are now directly competing with legacy retail brands such as Carrefour and Lulu, which are rapidly adopting AI-driven platforms, live inventory systems, and omnichannel logistics to remain competitive.

The rise of AI-enabled e-commerce, combined with hyper-personalized shopping experiences, is forcing retailers to adapt quickly. These advancements are setting the stage for a more integrated and dynamic retail environment in the coming years.

Beyond malls: Shift to micro fulfillment, experiential retail
While the region is set to add nearly 4 million square meters of new retail space by 2028, the future of retail is not just about expanding square footage. The trend is moving toward experiential shopping — where retailers are not only selling products but curating unique customer journeys. This shift is being enabled by technologies such as augmented reality (AR) and predictive personalization, which allow brands to offer tailored experiences both online and offline.

According to the report, “Success in the retail space will depend on the ability to merge the physical and digital in ways that resonate with today’s consumers.”