RETAIL
A BOOM AGAINST ALL ODDS Promising retail opportunities in the Middle East 2012
boom and the general outlook for retail development in the region is more promising than ever. Te Middle East has still eight of the top 20 countries in the GRDI according to the A.T. Kearney Global Retail Development Index.* According to the 2011 CBRE Retail Research Report, the markets of Saudi Arabia, Kuwait and Qatar have seen an increase in retailer interest of 15% or more of surveyed retailers who are targeting the region in 2012. Kuwait, Saudi Arabia and the UAE, who still rank in the top 10 of the GRDI, have not experienced the turmoil of some of their neighbours and have largely benefitted from providing stable markets in the region. A.T. Kearney believes that while political instability in countries such as
D
Tunisia and Egypt may affect immediate retailer entry plans, the region’s extraordinarily young and increasingly outspoken population could lead to greater economic stability and more global integration in the long run. Since global retailers generally prefer longer term expansion strategies, A.T. Kearney adds that the overall trend of globalisation will continue.
Unique advantages Tere are several reasons behind retailers’ current push to expand into Middle Eastern markets. First of all, countries such as Kuwait, Qatar and the UAE possess high levels of wealth and more robust economies than in Europe. Secondly, “a relative lack of international brands in some countries is proving an attractive combination for retailers looking to grow their
espite dominating headlines in 2011 with political unrest and demonstrations, the Middle East is currently experiencing a retail
businesses while new shopping centre development is allowing retailers to realise their expansion ambitions,” A.T. Kearney said. Stuart Gissing, Head of Retail Middle East at Colliers International, adds that in this part of the world, “shopping or dining out is a form of entertainment and being able to express one’s personality and capability to purchase products will keep retailing in a fairly robust position for the near future,” he said.
*Te A.T. Kearney Global Retail Development Index (GRDI)™ ranks the top 30 emerging countries
for retail development and identifies windows of opportunity for global retailers to invest in developing markets.
Kuwait – A forerunner Despite its small size with a population of just over 3 million, Kuwait is the region’s highest-ranked country (5th in the GRDI). Te largely young population with 96 per cent living in cities is an important factor contributing to the nation’s retail growth. As A.T. Kearney reports, these demographic trends have led to a retail sector growth of 8 per cent annually over the past five years while retail sales are expected to grow from $8.41 billion in 2011 to $11.92 billion in 2015. A high disposable income and a favourable economic outlook certainly help boost retail sales figures. Furthermore, “strong government support for improving citizens’ welfare is likely to boost consumer confidence and spending,” A.T. Kearney said. Kuwait’s largest shopping centre, Te Avenues Mall, is currently undergoing a massive expansion scheduled to be completed in September
10 I CITYSCAPE I MAY 2012
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