middle east analysis
And that has forced their hand and made them look at emerging markets.” “European operators are a little more aspirational, and
more open to the franchise model, and happy to look into other markets,” they added. Dubai led the way for the UAE retail scene attracting 55 percent of international retailers, just behind London. “Dubai is very much seen by retailers as a catalyst for this region. A lot of stores opened in Dubai Mall for the first time and will now roll out across the region. For franchises Dubai is a very safe market as it has a number of established malls and offers a good starting point. Other retailers think very highly of it,” remarked Leighton and Jay. “Also, from a logistical perspective, Dubai is very well established as a city in terms of being a fantastic logistics base with the free zones and industrial parks surrounding the city for retailers to operate from,” they added. CB Richard Ellis’ Leighton and Jay acknowledged that
1
UAE leading regional retail
Appeal of Middle East markets earmarked for expansion by major international retailers
The latest global survey released by CB Richard Ellis Middle East has the UAE ranked in second spot globally in terms of retail pulling power.
The ‘How Global is the Business of Retail?’ 2010 survey,
which examines the structure, sectors and trends in the global retail market, looked at the global footprint of 294 international retailers across 69 countries, exploring industry globalisation at national and city level, and high- lighting regional differences. Despite a difficult year for retail markets across the world,
the UK maintained its number one position with 58 percent of surveyed brands opting to enter the British market; the UAE followed with 54 percent, followed by the US (51 percent), France (50 percent) and China (47 percent).
Other regional markets have also climbed the
rankings this year with Saudi Arabia making the ninth spot with 43 percent and Riyadh, Jeddah and Kuwait City moving into the top 20 list for the first time. Commenting on the appeal of regional markets
and the move towards expansion out of traditional domestic markets into the emerging market arena, Mike Leighton and Matthew Jay, senior retail con- sultants at CB Richard Ellis Middle East, said: “If you take the US as an example, historically US retailers have been happy trading in their own country and are very reluctant to franchise and enter JVs. One of the results of the economic crisis has been that the US market dropped dramatically and was hugely affected.
Dubai’s leader board position is being challenged by other neighbouring destinations. “In terms of available mall space we don’t see much room for another scheme in Dubai, at least not for the next couple of years. It depends on what’s happening with the population as this affects retail. “This is key. We need to see the population increase otherwise what you see happening is retailers opening new stores but simply saturating and cannibalising their other stores because it is the same catchment, just dif- ferent sources.” “The big challenger is Abu Dhabi which has devel-
opments like Dalma Mall coming up, which will be the biggest in the emirate. In terms of the retail mix Abu Dhabi is looking to rival what’s happening in Dubai and challenge those schemes as a lot of the customer base is going to Dubai to shop, and Abu Dhabi is focusing very heavily on investing in malls,” they continued. “Abu Dhabi has one of the highest incomes per capita
globally, and retailers are also looking at expansion into Qatar as well as Kuwait, and Cairo is also starting to receive a lot of attention. Kuwait is popular because there are a couple of franchisers like Al Shaya and it is a very affluent market in terms of the population demographic. Retailers there were almost in their own bubble when the recession was on, and spending in Kuwait didn’t seem to change, the global situation had very little impact,” they added. Peter Gold, head of EMEA cross border retail, CB
Richard Ellis, commented: “Despite the much-publicised economic challenges in the Middle East, this region is fast becoming a prime spot on the global retail map.
10 /
/jun-sep 2010
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