KUWAIT: A report released by A T Kearney highlights a drop in Kuwait's ranking in the Global Retail Development Index (GRDI), reflecting the short term effects of lower oil prices and the impact on the short-term economic outlook of the country. Although the current prospects have decreased, the report also points to the strength of the longterm outlook for the country. Retail sales are projected to grow by six percent annually through to 2020 largely driven by ongoing urbanization. Luxury brands will also play a role in the long-term growth of the Kuwaiti retail sector.
With a GDP of $44,000 per capita, Kuwait boasts one of the highest standards of living in the world. Underpinned by its high proportion of youth population, as well as its growing expatriate workforce, Kuwait remains a prime destination for luxury brands. Shamail Siddiqi, Principal of the Consumer and Retail Practice, AT Kearney Middle East, stated: "As a result of the drop in oil prices, the past year has seen a more cautious approach to international expansion into some developing markets. However, many retailers are taking a longer-term view and look for more targeted investments in areas of growth. We find that this is precisely the strategy many retailers are taking in Kuwait, where the long-term prospects are still competitive." The 2015 GRDI includes a special feature on the prospects for luxury goods in developing retail markets. Martin Fabel, Partner and Global Head of the Strategy Practice, commented: "Our work with consumer industries and retail clients show that retail sales growth is expected to continue.
Luxury remains a relatively bright spot in emerging markets, as the wealthy have proven less vulnerable to economic woes than the general population." The feature includes an analysis of the 15 leading luxury brands and their presence in the GRDI's top 30 countries. The analysis shows that emerging markets fall into three tiers of luxury development, with different implications for brands looking to enter or expand in these markets.
Kuwait currently hosts 14 of the top 15 brands, indicating a strong local demand for luxury brands and an opportunity for luxury retailers to further penetrate the market. Published since 2001, the GRDI ranks the top 30 developing countries for retail investment worldwide.
The Index analyzes 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities. -- A T Kearney (www.atkearney.com) is a global team of forward- thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results. Since 1926, we have been trusted advisors on the most mission-critical issues to the world's leading organizations across all major industries and service sectors. A T Kearney has 58 offices located in major business centers across 40 countries.
From our Middle East offices in Abu Dhabi, Dubai, Manama, Doha and Riyadh, AT Kearney supports both private and public sector clients as well as nations to excel and prosper by combining our regional expertise and global business insights to achieve results.
© Kuwait Times 2015
