The GCC retail industry will surpass pre-pandemic levels in 2022, register a 15.7 per cent year-on-year growth and reach a revenue of $296.8 billion. The industry is expected to further grow at a compounded annual growth rate (CAGR) of 5.7pc by 2026, says Alpen Capital’s latest retail sector report.
Mega events including the World Cup, the return of tourism and population growth are among factors cited in the return to growth, with Duty Free Sales at airports also expected to grow by 65.5pc year-on-year to reach $2.2bn in 2022 and further projected to reach $3.0bn by 2026, implying a compound annual growth rate (CAGR) of 8.4pc.
Qatar will see the highest growth in the region during 2022, with its sales expected to reach $18.5bn, however, growth is expected to normalise at a CAGR of 3.5pc after the World Cup.
Favourable demographics, improving macroeconomic factors and tourism revival will contribute to the growth, along with governments’ push for economic diversification and growing prominence of retailers who sell in both bricks and mortar and online settings, the Alpen report said.
Sameena Ahmad, MD, corporate affairs, Alpen Capital said: “The industry was severely hit by the restrictions imposed during the pandemic; however, retailers were responsive to the changing demands and innovated to sail through difficult times.
As the retail industry continues to recover, there is an urgent need for retailers to upscale their digital presence to stay relevant as well as compete with regional and international players.”
Alpen said across the region, non-food retail sales are forecasted to grow at a CAGR of 6.2pc between 2022 and 2026, while food retail sales are anticipated to increase at an annualised rate of 4.9pc during the same period.
Saudi Arabia and UAE lead sales regionally, cumulatively accounting for 78.5pc of the total sales by 2026, the report added, due to large and diverse populations, liberalisation of policies and a growing appetite for unique shopping experiences.
Retail sales in the kingdom and the UAE are forecasted to grow at a CAGR of 6.5pc and 5.1pc, respectively, between 2022 and 2026, Alpen said. Bahrain, Oman and Kuwait are expected to grow at a CAGR of 7.3pc, 6.1pc and 3.5pc, respectively during the forecast period, Alpen concluded.
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