GCC retail sector is poised to grow at a compound annual growth rate of 5.7 per cent from Dh1.09 trillion this year to Dh1.35 trillion in 2026, according to the latest report presented by Alpen Capital at the 11th Middle East Retail Forum on November 15.
By 2026, Saudi Arabia’s retail sales will reach $176.5 billion, followed by $113.8 billion in the UAE, Kuwait with $26.3 billion and Qatar with $21.2 billion in retail sales, the report specified.
More than 300 retail industry experts from 20 participating companies gathered at the Jumeirah Beach Hotel in Dubai to map out the future of the retail industry and shed light on some core challenges and opportunities spawned by the digitalisation of the retail landscape.
Managing director of Alpen Capital, Krishna Dhanak, said: “The retail industry in the GCC is transforming at an unprecedented pace and scale, having recovered from the Covid-19 pandemic. Signs of recovery continue with rising population levels, with a high concentration of expatriates, backed up by the successful implementation of vaccination strategies, easing of Covid-19 restrictions and government stimulus measures.
“The GCC economies are expected to grow by 6.2 per cent – way higher than the rest of the world average, which will further boost the retail sector. However, the growth will be underpinned by digitalisation and growth in the e-commerce business.
“The retail industry is benefitting from the positive sentiments in retail sales on the back of strong post-pandemic recovery, backed up by rising per capita GDP which is one of the highest in the world.”
Dhanak also noted said easing air travel was a stepping stone in boosting the retail industry.
COO of Images Group Middle East and organiser of the Middle East Retail Forum, Justina Eitzinger, said: “Retail is one of the top three contributors to the GDP of the Gulf countries and provides employment to a large section of the population.
“Tourism, trade and retail will dictate the economic growth of the GCC region in the next few years and that makes the 11th Middle East Retail Forum a very significant meeting of industry leaders from which the rest of the retail sector will get direction for growth.
“Over the last year, we have seen how trade, tourism and retail sectors rebound, helping the economies to grow. And one of the reasons for stronger economic growth in the GCC is retail.”
COO of Jacky’s Retail, Ashish Punjabi, said: “We are looking at a more exciting year ahead, with Chinese consumers expected to start travelling sometime next year.
“Chinese consumers are one of the largest spenders in the luxury retail segment and they haven’t travelled for nearly four years. Once they start travelling to this region, imagine the jump in retail sales and we are looking at another boost in the retail industry.”
Punjabi also commended retailers for making great strides in the resuscitation of the retail sector post–restrictions.
A recent survey by Ayden and KPMG, one of the Big Four accounting organisations, showed that 73 per cent of businesses in the UAE grew in revenue by 20 per cent or more in 2021 across retail, food, beverage and hospitality sectors – which is more than 67 per cent higher when compared to the rest of the world and digital transformation has played a pivotal role to make this possible.
Vice president of Retail at Adyen, Yousef Almawy, said: “Among those surveyed by us and KPMG, 94 per cent of retailers said they will invest in technology to grow their business. The future of retail will be dictated by consumers and their user experience which requires deeper consumer engagement backed with data analytics.
“A shift from omnichannel to a unified retail channel is the way forward for retailers. If we don’t have connected systems, we are not going to be there.”
Retail sales are likely to rebound and rise by 2023 led by the forecasted rise in population and international tourist arrivals.
CEO and founder of Gates Hospitality, Naim Maadad, said: “The retail industry has firmly put the UAE on the global map. The question is how do we deal with the present and the future. We are all going to be part of the retail sector’s future as it evolves. However, there is no fixed manual for us to follow as we move forward – we script the manual that others might find useful.”
In the same vein, CEO of Grandiose Supermarket, James Scott, said: “We are seeing significant growth in the retail industry, in the economy and the liquidity situation. While the rest of the world is suffering from negativity and pessimism, the Gulf and the Middle East are an oasis of optimism. I see lots of optimism and positivity in the regional retail industry and I feel lucky to be part of such a vibrant economy.”
