16 June 2013
KUWAIT - The GCC's retail market is poised to reach $221 billion by 2015 at an annualized growth of 7.9 percent for the period 2012-15, mostly driven by food and beverages sector.
"Food, beverages and tobacco accounted for almost half of the GCC market in 2012 and we expect the trend to continue," Kuwait Financial Centre (Markaz) said in its GCC Retail Report. The retail industry is one of the fastest growing sectors in the GCC region.
"Though the overall economic growth in the GCC region suffered a setback at the onset of the global financial crisis, the retail sector posted robust growth and continued its upward trajectory," said Markaz. "The growing importance of retail in the GCC can be gauged from the fact that the city of Dubai, along with London, share the leading position for international retailers' presence. American and European retailers, for their expansion of operations consider Kuwait City, Riyadh and Jeddah as their top choices outside their home turf."
Markaz said a higher per-capita income and younger demographic profile of GCC nationals has a positive implication for the demand of high value luxury goods and electronics goods while the working expat population supports the surging demand for consumer goods.
According to A.T. Kearney, a global management consultancy, consumer spending in the GCC food retail sector is expected to reach $106 billion in the next five years. Food remains the largest segment of consumer expenditure in the region, standing at $83 billion at the end of 2012 of the total $300 billion.
In a recent forecast, Alpen Capital noted that the GCC retail industry is expected to cross the $270 billion mark by 2016.
GCC retail sales are anticipated to expand by a compound annual growth rate, or CAGR, of 7.7 percent between 2011 and 2016, the forecast said. Food retail sales are expected to grow at a CAGR of 8.8 percent during this period while non-food retail sales are likely to grow at an annual average growth rate of 6.6 percent.
The growing influx of tourists remains a key driver for the region's retail industry. International tourist arrivals in the GCC are forecast to grow from 37.3 million in 2011 to 44.4 million in 2016.
In the UAE, the retail sector has grown so fast over the past years that it has become a major sector, contributing 14 percent of the economy. The growth was driven by many factors, including the presence of a modern world-class shopping infrastructure. A retail industry forecast for the Middle East has identified Saudi Arabia, Qatar, Kuwait and the UAE as the most dynamic markets with the highest potential in the region. Analysts pointed out that the presence of a large expat population and the upswing in tourist arrivals have helped to sustain the growth momentum.
KUWAIT - The GCC's retail market is poised to reach $221 billion by 2015 at an annualized growth of 7.9 percent for the period 2012-15, mostly driven by food and beverages sector.
"Food, beverages and tobacco accounted for almost half of the GCC market in 2012 and we expect the trend to continue," Kuwait Financial Centre (Markaz) said in its GCC Retail Report. The retail industry is one of the fastest growing sectors in the GCC region.
"Though the overall economic growth in the GCC region suffered a setback at the onset of the global financial crisis, the retail sector posted robust growth and continued its upward trajectory," said Markaz. "The growing importance of retail in the GCC can be gauged from the fact that the city of Dubai, along with London, share the leading position for international retailers' presence. American and European retailers, for their expansion of operations consider Kuwait City, Riyadh and Jeddah as their top choices outside their home turf."
Markaz said a higher per-capita income and younger demographic profile of GCC nationals has a positive implication for the demand of high value luxury goods and electronics goods while the working expat population supports the surging demand for consumer goods.
According to A.T. Kearney, a global management consultancy, consumer spending in the GCC food retail sector is expected to reach $106 billion in the next five years. Food remains the largest segment of consumer expenditure in the region, standing at $83 billion at the end of 2012 of the total $300 billion.
In a recent forecast, Alpen Capital noted that the GCC retail industry is expected to cross the $270 billion mark by 2016.
GCC retail sales are anticipated to expand by a compound annual growth rate, or CAGR, of 7.7 percent between 2011 and 2016, the forecast said. Food retail sales are expected to grow at a CAGR of 8.8 percent during this period while non-food retail sales are likely to grow at an annual average growth rate of 6.6 percent.
The growing influx of tourists remains a key driver for the region's retail industry. International tourist arrivals in the GCC are forecast to grow from 37.3 million in 2011 to 44.4 million in 2016.
In the UAE, the retail sector has grown so fast over the past years that it has become a major sector, contributing 14 percent of the economy. The growth was driven by many factors, including the presence of a modern world-class shopping infrastructure. A retail industry forecast for the Middle East has identified Saudi Arabia, Qatar, Kuwait and the UAE as the most dynamic markets with the highest potential in the region. Analysts pointed out that the presence of a large expat population and the upswing in tourist arrivals have helped to sustain the growth momentum.
© The Saudi Gazette 2013
